Spanish trainer Javier Clemente had been on the verge of agreeing terms with Iran last month but talks collapsed when he refused to live full time in the country , leaving officials to search for a home grown coach.
Daei, the leading international scorer in football history, had been mooted as an outside choice, but the focus had been on the candidacy of Iranian-American Afshin Qotbi. "After examining Ali Daei's plans, he was officially named as head coach of the national team," ISNA quoted the Iranian football federation's head Ali Kafashian as saying.
"Initial talks were held with Ali Daei over the past days and today we held a meeting with him where he submitted his plans to the federation," he added.
Iran made a poor start to their World Cup campaign last month by only drawing with minnows Syria.
Daei started his coaching career with an away loss in Bahrain in preparation for the World Cup qualifiers at Kuwait.
Daei, whose career included spells at Bayern Munich and Hertha Berlin, only retired fully from playing in 2007 and until now has coached Tehran club side Saipa.
Despite some initial difficulties , Daei managed to qualify for the next round of World Cup 2010 qualification , where Iran was grouped with South Korea , Saudi Arabia , North Korea and UAE. The difficulties , however , continued in the next round. A series of draws meant bleeding of points which put Iran behind their main rivals. A loss to Saudi Arabia at home in Azadi where Iran needed to win to assure themselves of qualification forced the federation to sack Ali Daei after one year in charge.
