The Italian returned to Stamford Bridge today following his holiday to finalise a two-year contract.
Chief executive Ron Gourlay says: 'Roberto's quality was clear for all to see when he galvanised the squad last season and helped the club make history, and the owner and board are very pleased he will be continuing his good work.
'We all believed he was a young coach with much to offer when we first asked him to take charge of team affairs in March and the manner in which he worked with us, the players and all the staff, and the success that followed, made him the clear choice when it came to selecting the person to take us forward in the seasons to come.
'We will be working closely with Roberto in the weeks ahead, some exciting signings have already been made and Roberto has had input into those.
'Although he has set the bar very high in the short time he has been in charge, we know that Roberto is the right man to lead Chelsea onto further success.'
Di Matteo, who turned 42 last month, was interim first-team coach for the final 11 weeks of last season, leading the club to an historic Champions League and FA Cup double triumph.
He stepped up to the role following the departure of Andre Villas-Boas during the first weekend in March and won the next four matches including a tricky FA Cup replay away to Birmingham City and the memorable second-leg turnaround against Napoli.
He said: "I'm obviously delighted to have been appointed as Manager and First-Team Coach. We all achieved incredible success last season that made history for this great club. Our aim is to continue building on that and I'm already planning and looking forward to the squad's return for pre-season."
We lost only three matches after he took charge. And although ultimately Chelsea finished outside the top-four places, our success in Europe, that saw Benfica and Barcelona beaten before the victory against Bayern Munich in their home stadium, meant that not only had Di Matteo guided the club to our first Champions League title, but we had also ensured our place in the competition next season.
The Wembley win over Liverpool in early May continued his already sparkling FA Cup history at Chelsea.
Di Matteo is the fourth Italian to manage Chelsea, continuing his association with the club that began in 1996 when he signed as a player from Lazio, the choice of Ruud Gullit.
An international midfielder, he ended his first season by scoring in the FA Cup Final as major silverware was brought back to Stamford Bridge for the first time in 26 years. He also found the net in a League Cup Final win and another FA Cup Final before injury forced his retirement at the age of 31 having played 175 games and scored 26 goals for the club.
He returned to Chelsea as assistant first-team coach under Villas-Boas at the start of last season having become a manager for the first time at League One MK Dons in 2008. A year later he moved up a division to West Bromwich Albion whom he then took into the Premier League at the first time of asking. He was named the top-flight manager of the month in September 2010 but left The Hawthorns in February 2011.
Gourlay adds: 'We are already looking forward to the 2012-13 season which kicks off when Roberto, his staff and players return for pre-season.'
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