The former Chelsea, AC Milan and Juventus manager replaced Antoine Kombouare, who left his job earlier Friday even though PSG is in first place at the halfway stage of the season.
“I am delighted to be here as coach of Paris Saint-Germain,” Ancelotti said at a news conference. “I think PSG is a fantastic club. I think I can do a great job to help PSG become a big club in Europe.”
Ancelotti’s appointment had been expected since the club’s sporting director Leonardo met with the 52-year-old Italian in Paris last month.
He will reportedly be followed to the club by former England captain David Beckham, who could sign as soon as Sunday when the transfer window opens.
Ancelotti would not be drawn on which players he might target in January, backed by the club’s new Qatari owners.
“I don’t know if it’s a good idea to name names right now as these are players who have a certain status in their clubs,” he said.
Former France midfielder Claude Makelele will take on a coaching role under Ancelotti, who led Milan to the Champions League title in 2003 and 2007, and guided Chelsea to the Premier League and FA Cup double two seasons ago.
Ancelotti was sacked by Chelsea in May after failing to win a trophy in his second season.
“The English experience helped me a lot, it was a fantastic experience, but there is a great challenge here with PSG,” Ancelotti said. “The club has everything to succeed and enormous ambition.”
Qatar Sports Investment took over PSG in June and spent 82 million Euros ($116 million) on players, seeking a first league win since 1994 and qualification for the Champions League after a seven-year gap.