— Valencia CF 🦇💯 #AMUNTWorld 🌍 (@valenciacf) July 27, 2020
A report in Marca over the weekend claimed that Gracia and Los Che had reached a personal agreement last week before club owner Peter Lim gave his approval to the deal.
Gracia has penned a two-year contract at the club through to the summer of 2022, and will be the seventh permanent manager since Lim took control.
Long-serving Valencia custodian Voro had been interim coach at the Mestalla for the final weeks of the 2019/20 campaign but he failed to turn around their struggling fortunes, with the club missing out on qualification for Europe.
Valencia have missed out on European football this summer and the club reportedly have to slash their budget by up to 40 percent ahead of next season, with reports from Spain earlier this month outlining how multiple player exits are expected this summer.
Gracia is most well-known in Spain for his two-year stint in charge of Malaga between 2014 and 2016, leading the cash-stripped club to successive top-half finishes.
He subsequently left the Andalusian club to join Russian club Rubin Kazan before switching to Watford in January 2018 and subsequently leading the Hornets to last season’s FA Cup final.
However, he was removed from his position earlier this season after a winless start to the campaign and has been out of work in the months since.