Everton confirmed the appointment of Carlo Ancelotti as their new manager on a four-and-a-half-year contract just before Saturday’s goalless draw against Arsenal.

Ancelotti watched from the Goodison Park stands before formally taking up his position on Sunday. He succeeds Marco Silva, who was sacked this month, and his arrival will be regarded as a significant coup for the club and its majority shareholder, Farhad Moshiri. Everton are 15th in the Premier League and had feared becoming embroiled in a relegation fight until a recent upturn under the caretaker manager, Duncan Ferguson.

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“This is a great club with a rich history and a very passionate fan base,” Ancelotti told Everton’s website. “There is a clear vision from the owner and the board to deliver success and trophies. That is something that appeals to me as a manager and I am thrilled at the prospect of being able to work with everybody at the club to help make that vision a reality.”

Ancelotti, whose first match in charge will be the home meeting with Burnley on Boxing Day, will inherit an improved situation from Ferguson. The former Everton striker has overseen impressive performances against Chelsea, Manchester United and Leicester – as well as the more sterile draw with Arsenal – and Ancelotti confirmed he will remain part of the staff.

“I have seen from the performances in the last two weeks that the players are capable of so much. The work Duncan has done is a great credit to him. Strong organisation, strong discipline and the right motivation are some of the key ingredients in football and I’m pleased he will be part of my backroom team moving forward.”

Everton (@Everton) 🔵 | Introducing the new manager of Everton Football Club, @MrAncelotti! #WelcomeMrAncelotti pic.twitter.com/zNNoix8H5R

Speaking after the Arsenal game, Ferguson outlined his excitement at working with Ancelotti. “We knew before the game the club were about to appoint an unbelievable manager, that gave everyone a lift,” he said. “We wanted a world-class manager and now we’ve got one, I can’t wait to start working with him and learning from him.

“I haven’t heard anything about my position yet but I’ve had a quick word with the new boss and he seems happy with me. I haven’t any advice for him, it’s not for me to tell such a legendary manager what to do, but he’s watched the last few games, he knows there is a good spirit here. He came into the dressing room at the end of the game and gave a lovely speech to the players.”

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Less than two weeks have passed since Ancelotti was dismissed by Napoli and his quick return to top-level football is the latest move in the 60-year-old’s long and successful career. Ancelotti has won the Champions League twice with Milan and once with Real Madrid, while he has won Serie A with Milan, the Bundesliga with Bayern Munich and Ligue 1 with Paris Saint-Germain.

This will be Ancelotti’s second stint with a Premier League club. His arrival at Chelsea in 2009 led to the club’s first domestic double in the 2009-10 season. His final game, coincidentally, came at Goodison Park on 22 May 2011 after the club finished as runners-up in his second season.

Marcel Brands, Everton’s director of football, hailed Ancelotti’s arrival. “He is the perfect appointment for us,” he said. “He embraces our vision for the club and we are sure his enthusiasm to take the helm at Goodison together with his tactical abilities and well-renowned man-management will make him successful.”

Ancelotti was joined in the directors’ box by the new Arsenal head coach, Mikel Arteta, who will also take on his new role on Sunday.