Goal.com reported earlier this month that the Argentina legend was keen on taking over the side for its bid to reach the 2014 FIFA World Cup after Zico had resigned from the post in November.
Iraq announced on the AFC website on Friday that Iraq had appointed interim boss Shakir on a permanent basis, though, after he impressed in guiding his side to the final of the AFC Under-19 championship earlier this year.
Maradona, who has been working as a consultant to UAE side Al-Wasl after previously coaching the team, was said to have been in competition with former England boss Sven-Goran Erikkson for the role with the Middle East nation. Shakir's first test as full-time boss will be in the Gulf Cup in Bahrain, which begins next week.
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