Milan, Jun 19: Former Sampdoria boss Marco Giampaolo has been appointed new coach of AC Milan on a two-year deal, the Serie A side announced on Wednesday. The 51-year-old, who will take over on July 1, also has an option of a third year as part of a deal reported to be worth two million euros annually.

"Giampaolo will now coach AC Milan's first team on the first day of the new season's training at Milanello on July 9th," Milan said in a statement.

Giampaolo replaces former player Gennaro Gattuso who quit last month amid reports of financial cutbacks after leading the club to a fifth-place finish in Serie A. AC Milan Coach Gattuso to Quit over Austerity -- Reports.

Sporting director Leonardo also left the club with former players Zvonimir Boban and Paolo Maldini brought in as part of an overhaul at the seven-time European champions. Giampaolo led Sampdoria to ninth-place last season having previously coached Empoli, Brescia and Cagliari. Milan will have a tight transfer budget due to Financial Fair Play restriction and are also in a legal battle with UEFA over whether or not they feature in Europe next season.

The club won the last of their 18 Serie A titles in 2011.

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