Carlo Ancelotti has been confirmed as Chelsea's new manager, and the Italian immediately revealed his principle aim is to realise “the dream” of bringing the Champions League title to Stamford Bridge.

Ancelotti, who signed a three-year deal worth £6.5million-a-season after quitting AC Milan last night, won the European Cup as a Milan player in 1989 and 1990, and in eight years as a coach at the club he lifted the Champions League in 2003 and 2007.

He said: “For me, the Champions League is a beautiful sensation. The Champions League, for me, is the best competition in the world.

“Chelsea has a great record, five semi-finals in six years. It is a beautiful score — but now we need to win. To build a dream, for me, is the most important thing.”

Ancelotti replaces Guus Hiddink, whose short stint in charge of the Blues climaxed with Saturday's FA Cup Final victory over Everton.

Two big names, Franck Ribery and David Villa have immediately been identified as possible new signings.

A statement on Chelsea's website read: “Carlo was the outstanding candidate for the job. He has proved over a long period his ability to build teams that challenged for, and have been successful in, major domestic and European competitions.

“He also had a highly successful playing career in those competitions and therefore brings unparalleled all round experience to the job.”

What Ancelotti doesn't have is a grasp of fluent English, a disadvantage that counted against Brazilian World Cup winner Luiz Felipe Scolari.

But he insisted that learning the language will be a priority.

Speaking to Chelsea TV without recourse to a translator, he said: “This is my first interview in English and it is not easy. But I want to learn, I want to improve. When we start the new season I will speak (English) well because it is important for me to speak with the players, with the team, with the assistants, with all the operators that will work with me.”

Some of Milan's players are believed to have been in tears when Ancelotti revealed he was leaving and general manager Adriano Galliani admitted Ancelotti's exit had been hard to take.

“My relationship with him has been more as a friend than as a manager and to see him on the Chelsea website holding a Chelsea shirt has left its mark on me,” said Galliani.

But Ancelotti, who has been replaced by Leonardo at Milan, admitted the lure of taking charge of a top Premier League team was too good to resist.

He said: “I would like to thank the Milan team, the Milan company, the Milan players and the Milan fans. I had eight very good years there, and five years as a player, but now I think is the right moment for a new challenge.

“I think Chelsea was a great opportunity and a great team to do a new experience. I like the Premier League because there are great teams and they play good football. Now there are more tactical matches and very speedy, I like this football. The teams think to defend well and afterwards to attack. I watch Chelsea, I watch Liverpool, I watch Manchester United, I know very well English football.”

Ancelotti becomes the fifth man in charge of Chelsea in less than two years following the reigns of Jose Mourinho, Avram Grant, Scolari and Hiddink.

He added: “There will be the same pressure because Chelsea and Milan are great teams in Europe and they want to win all competitions.
“I believe in teamwork. It is the most important thing to create a group that work together.”

Standard Sport understands chief scout and director of youth development Frank Arnesen flew to Spain last Thursday to meet Villa's representatives to discuss a move to Chelsea.

On the same day Bayern Munich's Ribery is believed to have flown into Farnborough Airport by private jet and driven straight to Stamford Bridge for talks with club representatives.