The former Athletic Bilbao and Olympiakos boss will take charge at la Mestalla until the end of the current campaign, replacing Mauricio Pellegrino, who was sacked on Saturday
The 48-year-old, who guided Olympiakos to the Greek championship title earlier this year, will replace Mauricio Pellegrino at the helm of the Liga outfit until the end of the season, after the Argentine was sacked over the weekend.
A statement on the club's official website confirmed the news: "Valencia have reached an agreement with Ernesto Valverde to be the coach of the first-team until June 30, 2013.
Valverde will be officially presented as the new coach of Valencia CF this Monday, December 3."
The former Barcelona and Athletic Bilbao defender, who earned a cap for Spain in 1990, has also served in coaching roles at Espanyol and Villarreal.
He will take charge of Los Che for the first time in their Champions League clash with Lille OSC this coming Wednesday.