Paraguay have named Argentine Ramon Diaz, who won the Argentine league title with River Plate this year, as their coach on Thursday.

'Ramon Diaz and the Paraguayan Football Association (APF) have sealed a four-year work accord,' APF president Alejandro Dominguez told a news conference in the capital.

'It's one of the biggest challenges of my career... There's a lot of work to do,' said former River, Inter Milan, Monaco and Argentina striker Diaz.

Ramon Diaz has been appointed national coach of Paraguay on a four-year contract

Diaz gives a thumbs up beside Alejandro Dominguez, president of the Paraguayan Football Association

Diaz, River's most successful coach ever with six league titles and the 1996 Libertadores Cup plus a league crown with San Lorenzo, takes over from caretaker Victor Genes.

Genes had been in charge since Uruguayan Gerardo Pelusso was sacked in late 2013 after Paraguay failed to qualify for this year's World Cup in Brazil.

Paraguay achieved their best World Cup placing in 2010 when they reached the quarter-finals in South Africa under Argentine Gerardo Martino, who is now in charge of his home country.

Diaz, with son Emiliano in his backroom staff, faces his first big test at the 2015 Copa America in Chile, which kicks off on June 11 and where they have been drawn in the same group as Argentina, holders Uruguay and Jamaica.

Paraguay, who had qualified for four successive World Cup tournaments since 1998, lost their way when Martino quit after steering them to the 2011 Copa America final in Argentina.

Handing the task of qualifying for the Brazil finals to the inexperienced Francisco Arce, a fine former international full back, was soon seen as a mistake after a poor start to the qualifying campaign and matters did not improve under Pelusso.

Oscar Cardozo (right) scores against Japan en route to the 2010 World Cup quarter-finals

Former Paraguay captain Jose Luis Chilavert does not think Diaz should have been given the job

Charismatic former goalkeeper and captain Jose Luis Chilavert believes grass-roots work is what is needed and does not see Diaz as the right man for the job.

'Ramon Diaz is not the coach Paraguay need, he doesn't develop players and what we need is development,' Chilavert told the Futbol 780 radio programme.

'I don't see a positive outlook for the national team. We must work looking at the long term and the people who handle the team lost a lot of time after Martino's departure.'