Former Argentina international Simeone, who are going to be officially presented to the media on Tuesday, returns to the Vicente Calderon stadium when 2 previous stints there as a player.
The Atletico board turned to the 41-year-old when losing patience with Manzano, whose last game accountable was Wednesday's 1-0 home loss to 3rd division aspect Albacete.
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That defeat saw Atletico crash out of the Spanish Cup 3-1 on mixture, whereas they're conjointly trailing in tenth place within the Primera Liga, twenty one points behind leaders and town rivals Real Madrid.
Director of soccer Jose Luis Caminero told the official Atletico website: "The results haven't been sensible and that we determined that to alter the direction of the team, we have a tendency to had to alter the coach.
"Diego has signed a contract for the rest of this season and for next season. He is aware of the strain of the fans as a result of they perceive, like us, that this club should be close to the highest.
"Our goal should be to be among the highest four clubs, Diego is alert to this demand and that we are assured that we are going to achieve it underneath him."
As a player, Simeone starred for Argentina within the 1994, 1998 and 2002 World Cups gaining notoriety within the 1998 tournament in France when David Beckham's kick at him resulted within the England midfielder's dismissal.
He retired as a player in 2006 and has coached Italian club Catania, still as Argentine sides Racing Club, Estudiantes, River Plate and San Lorenzo.
Meanwhile, Holders Real Madrid and Barcelona are in line to fulfill within the quarterfinals of the Spanish Cup, if each side win their last sixteen matches next month.
Jose Mourinho's aspect face a difficult two-legged encounter with Malaga, whereas Barcelona withstand Osasuna, with another El Clasico clash lying in wait ought to they each progress.
The Spanish giants met in last season's final, with a Cristiano Ronaldo header in extra-time securing victory for Real, the sole Madrid victory in seven matches against their rivals in 2011.
