Former Liverpool midfielder Alonso sensationally led Bayer Leverkusen to the Bundesliga title in 2023-24 in his first managerial role at a top club after retiring as a footballer.
That performance led to his appointment as head coach of Real Madrid in May 2025, but poor form in LaLiga and a lack of cohesion within the superstar squad resulted in his leaving Los Blancos by mutual consent in January 2026.
He has been out of work since then but has remained a much-sought-after leader with many suspecting he was set to replace Arne Slot as Liverpool boss at the end of this season.
However, with Slot looking increasingly likely to stay on as Liverpool manager, Alonso has pivoted towards another Premier League club in Chelsea.
The Spaniard has penned a four-year deal with the London side and will begin his tenure on 1 July 2026.
"Chelsea is one of the biggest clubs in world football and it fills me with immense pride to become manager of this great club," he said in a statement.
"From my conversations with the ownership group and sporting leadership, it is clear we share the same ambition. We want to build a team capable of competing consistently at the highest level and fighting for trophies.
"There is great talent in the squad and huge potential at this football club, and it will be my great honour to lead it. Now the focus is on hard work, building the right culture and winning trophies."
The Blues sit ninth in the 2025-26 Premier League standings with one game of the season to play and have been without a head coach since Liam Rosenior was sacked in April.
Notably, Alonso will join as the club's manager, not the head coach, meaning he will have far more influence over Chelsea's backroom affairs than Rosenior was afforded.
The signing is seen as a significant coup for the Blues as Alonso was considered one of the top managerial candidates on the market, as they look to re-establish themselves as one of the top clubs in England.
Bournemouth boss Andoni Iraola, Fulham head coach Marco Silva, Crystal Palace bos sOliver Glasner and former Arsenal star Cesc Fabregas were believed to be the other leading contenders for the position.