The striker turned coach returns to the Mestalla 20 years on from his first spell there with the tough task of getting a disjointed team back on track.
Djukic was shown the door following a poor start to the 2013-14 season, ultimately culminating with the Serbian trainer's dismissal after a 3-0 loss to Atletico Madrid earlier in December.
Los Che announced the signing of the new boss via their official website on Boxing Day with the following statement:
"Valencia have completed the hiring of Juan Antonio Pizzi as the new coach of the club. The trainer arrives at the Mestalla after winning the Argentine league with San Lorenzo (and the Chilean league with Universidad Catolica in 2010). He is accompanied by assistants Alejandro Richino and Manuel Suarez.
"The date and time of the coach's arrival in Valencia and official presentation will be announced soon."
Pizzi enjoyed a fruitful career in La Liga as a player, representing Barcelona, Valencia and Tenerife.
Although the 45-year-old was born in Argentina, he chose to represent Spain at international level, scoring eight goals in 22 appearances for la Furia Roja.