Kenny Dalglish has signed a three-year contract to become Liverpool's permanent manager.
The Scot has been in temporary charge since replacing Roy Hodgson in January but such has been the turnaround in results his appointment as full-time boss was never in doubt.
Negotiations have been ongoing for several weeks but the final details have now been agreed.
Coach Steve Clarke, who also arrived in January, has also signed a three-year contract.
Dalglish said: "I said when I took the job on in January that I was just happy to help the club out for the remainder of the season.
"Now the owners have decided in their wisdom that they want me to stay a little longer and it's fantastic news for both myself and Steve Clarke that we have signed these contracts.
"Both (principal owner) John (W Henry) and (chairman) Tom (Werner) have taken their time to assess what was best for the football club and bring in the people they wanted to take the club forward.
"They are both winners, but understand what the supporters want from a Liverpool side and the way that we should go about things. This is a unique football club and I'm delighted to have the opportunity to help build something special here again."
Club owner Henry admitted there was no one else in the frame for the job, and said no one else could have achieved the turnaround in atmosphere at the club after the poor start to the season under Roy Hodgson.
"Kenny is a legendary Liverpool figure both as a supremely gifted footballer and successful manager," Henry said.
"Since returning in January he has shown extraordinary leadership and the ability to bring the best out of so many people associated with the club.
"It was obvious to us very early on that the atmosphere surrounding the club had been transformed by his presence. No one else could have produced such a response. Therefore, I'm delighted we have agreed to a new contract. We didn't need nor want to look elsewhere for the right man to manage the team.
"Working closely with him, we've seen first-hand his love for the club and his determination to do whatever is necessary to produce a winning side again. He has a unique relationship with our supporters and embodies everything that is special about the Liverpool way of doing things.
"Liverpool enjoys a global standing within the sport, but having Kenny in the dug-out will help us in our efforts to bring the best available talent to the club as we continue to move the club forward.
"I'm also pleased we have reached an agreement with Steve Clarke, as his contribution to Kenny's backroom team has been significant over the past four months."