(CNN) -- Former Valencia coach Enrique Sanchez Flores has been named as new coach of Benfica on a two-year contract, the Portuguese side announced on Saturday.
Flores was dismissed as coach of Spanish club Valencia last October.
The announcement ends speculation that former England coach Sven-Goran Eriksson would be returning to the Portuguese club.
Flores, 43, was unveiled at a Lisbon media conference as the replacement for Jose Antonio Camacho, who resigned in March complaining of his players' lack of motivation.
"We've got a lot of ambition, but we must be cautious,' stressed club president Luis Filipe Vieira, who sat with former player-turned sporting director, Rui Costa.
Benfica, who completed the season under caretaker coach Fernando Chalana, failed to qualify for the Champions League after finishing fourth in the Portuguese Premier League. Porto took the title, 17 points clear of their rivals.
Spaniard Flores had 10 seasons as a player with Valencia and later helped Real Madrid win the Spanish title in 1995.
He also played for Real Zaragoza and made 15 appearances for his country.
After coaching the Real Madrid youth team he led newly promoted Getafe to a respectable 13th place in the Primera Liga and then succeeded Claudio Ranieri at his former club Valencia.
He guided them to a third-place finish and the quarterfinals of the following season's Champions League. But, although they qualified for the Champions League again, a run of poor results led to his dismissal in October 2007.
Earlier this month sources at Benfica expressed confidence that Eriksson would be returning to them after two previous spells in charge.
The Swede's departure from Manchester City has been expected for some time after Thai owner Thaksin Shinawatra suggested he would sack him.