The former Real Madrid striker will take over the first team from Efrain Flores, the Mexican Primera Division club announced in a statement released on Tuesday
The 53-year-old, who coached the Mexican national team between 2006-08, takes over from Efrain Flores, who could not reach agreement on a new contract with the club.
A statement on the Pachuca website confirmed that the former Mexico international striker will be unveiled as their new coach on Friday.
Widely regarded as one of the greatest Mexicans to have played the game, Sanchez began his career in 1976 with Mexican club Pumas before moving to Spain to play for Atletico Madrid, and eventually, Real Madrid.
His first coaching job was with Pumas in 2000 and he also had a brief stint as coach of Spanish club Almeria in 2009.