The former Real Madrid assistant, who has been out of work for 18 months, will now return to his homeland almost six years after his last job in the countrySporting Braga have announced that Jose Peseiro has been installed as the club's new coach.
The 52-year-old will take over from Leonardo Jardim, whose Braga contract was terminated last week after guiding the club to a third-placed finish in the Portuguese Liga.
Peseiro, a former assistant to Carlos Queiroz at Real Madrid in 2003-04, had been without a job since being sacked by Saudi Arabia in January 2011.
"When I left Saudi Arabia, I said that the sporting project was more important than the salary," Peseiro told reporters at a press conference.
"Luckily, this opportunity appeared and I accepted it, even though I had other offers, in other countries, with better salaries, but the desire to return to Portugal to win titles made me come to Braga.
"I want to win titles and I am in the right place for that."
Braga, who finished 13 points behind league winners Porto, will play in the Champions League play-off round next season.