(CNN) -- Dutchman Henk ten Cate has been named the new coach of Greek side Panathinaikos on a two-year contract.
Ten Cate (right) during his brief spell as assistant coach to Avram Grant at Chelsea.
The 54-year-old will replace Portuguese Jose Peseiro, who was sacked last month after just one season at the Athens club.
The club did not reveal financial details, but local newspaper SportDay said his annual salary will be 1.5 million euros ($2.3 million).
Ten Cate has coached Ajax, Sparta Rotterdam and Vitesse, and has also been an assistant coach at both Barcelona and Chelsea -- where he was sacked last month following the departure of the London's club's manager Avram Grant.
"I'm delighted to have reached an agreement with Panathinaikos. In my career I have been used to working at the highest level of competition and that's one of the reasons why I consider this new step to be a great challenge," said ten Cate.
"Panathinaikos' organization, history, ambition and attitude match those of the greatest clubs in Europe, so I'm confident that we will achieve our goals. I'm looking forward to coming to Athens and meeting my players," he added.
Panathinaikos will play in the qualifying rounds of the Champions League.