The 49-year-old Spaniard takes over at the Red Eagles following a successful three-year stint with Orlando Pirates.
Riveiro's appointment comes just days after he oversaw his final match in charge of the Buccaneers - a commanding 3-0 win over Golden Arrows in the Betway Premiership on Tuesday.
Though initially expected to depart at the end of the season, the Sea Robbers agreed to release him early after Al Ahly tabled a bumper offer.
According to leading African journalist Micky Jnr, the deal reflects Al Ahly's continued ambition to dominate African football and comes as a major statement of intent.
During his time in South Africa, Riveiro led the Pirates to five major trophies, including an unprecedented three consecutive MTN 8 titles.
His tenure ended on a mixed note, having fallen short of a third successive Nedbank Cup win after a 2-1 loss to Kaizer Chiefs in the final.
Al Ahly, widely recognised as Africa's most decorated club, will hope Riveiro can build on their continental legacy.
Meanwhile, Orlando Pirates begin life without their Spanish tactician, whose impact on the Soweto giants will be remembered for the silverware and stability he brought.
Golden Arrows' woes continued as they slumped to a 3-0 defeat against Orlando Pirates at Orlando Stadium on Tuesday, extending their winless run in the Betway Premiership to six matches.
Spanish coach Jose Riveiro has officially parted ways with Orlando Pirates, bringing an end to a three-year spell he describes as a "game changer" for his personal growth.
Jose Riveiro has closed the chapter on his time in South African football, declaring he will never coach another team in the country following his departure from Orlando Pirates.
Orlando Pirates gave departing head coach Jose Riveiro a fitting farewell after thumping Golden Arrows 3-0 in their Betway Premiership encounter at the Orlando Stadium.
