Paris: Laurent Blanc will be France's next coach after the French football federation and his former club Bordeaux reached a deal.
Blanc quit as Bordeaux coach last week and confirmed he wanted to succeed Raymond Domenech as France manager after the World Cup.
Bordeaux, which wanted Blanc to see out his contract and stay with the club until June 2011, had asked the French federation for financial compensation.
"The French football federation, via its president Jean-Pierre Escalettes, and the Girondins de Bordeaux, via their president and shareholder, reached a deal in the perspective of Laurent Blanc's hiring as France coach," the French federation said on Thursday in a statement.
Blanc, who guided Bordeaux to the French league title in 2009, was part of the France team that won the World Cup in 1998 and the European Championship in 2000.
Last year, the 44-year-old Blanc ended Bordeaux's 10-year wait for the French title in just his second season in charge and looked poised for another successful year when his team held a 10-point lead atop the French standings at the winter break.
But a run of poor results saw Bordeaux slump to sixth place and fail to qualify for European competition next year.
Blanc, however, remains a popular figure for the attacking football he developed at Bordeaux, and enjoys strong support from his former France teammates.
Domenech will step aside after the World Cup, ending a troubled six-year reign.
As a player, Blanc started out in Montpellier, where he signed his first professional contract in 1983. He also played for Napoli, Marseille and Barcelona before ending his illustrious career at Manchester United. He played for France 97 times, scoring 16 goals.
Blanc replaced Ricardo as Bordeaux coach at the end of the 2006-07 season and led the club to a second-place finish in the French league, winning the coach of the year award.