Club president Florentino Pérez said of Camacho, who made over 500 appearances for Madrid between 1974 and 1989: "Camacho has always been in the hearts of everyone at the club and 'madridismo' itself."
He takes over from Queiroz, who arrived at the Santiago Bernabéu in June 2003, succeeding Vicente del Bosque. However, the Portuguese has been unable to steer the club to any silverware and Madrid's directors decided to replace him with a year to run on his contract after the Merengues' season fell apart in the spring.
Champions League exit
After their Copa del Rey final defeat by Real Zaragoza in March, Madrid exited the UEFA Champions League in the quarter-finals, beaten by AS Monaco FC and - to be precise - the goals of one of their own, on-loan striker Fernando Morientes.
Since then their league form has collapsed and Madrid's club-record fifth straight defeat against Real Sociedad de Fútbol yesterday meant that they ended the season in fourth place, missing out on automatic qualification for the UEFA Champions League. Now that they must enter the tournament's third qualifying round, Madrid may be forced to cancel a lucrative summer tour of Asia.
Camacho will be unveiled to the press tomorrow having agreed a two-year deal. The 48-year-old was in charge of Spain at UEFA EURO 2000™ and the 2002 FIFA World Cup, and last week won his first trophy as a coach when he led SL Benfica to victory over FC Porto in the Portuguese Cup final. He had yet to renew his one-year contract with the Lisbon club.
'Lack of success'
Pérez said: "It has not been a good year for us and that is something that really hurts us. Real Madrid have always been a successful club and the lack of success this season has left us without an option but to announce that Carlos Queiroz will not continue [as coach] and from Tuesday, José Antonio Camacho will be the new coach."
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