The Portuguese replaces the sacked Louis van Gaal and is one of the most decorated and divisive figures in the modern game. The 53 year old's appointment comes following three days of talks between agent Jorge Mendes and senior United officials.
He has already been linked with a move for 34-year-old Zlatan Ibrahimovic who played under Mourinho during his successful reign at Italian side Inter Milan.
He said he had always "felt an affinity with Old Trafford" and claimed he has always "felt loved" by United's fans.
As well as three Premier League titles with Chelsea, he led Real Madrid to the La Liga title in 2012 and has enjoyed double domestic and European success (2004 and 2010) at Porto and Inter Milan.
Despite a glittering CV, Mourinho will have a lot to prove at Old Trafford with his reputation tainted after a serious of "toxic" incidents that resulted in his dismissal amid "palpable discord" in December at Chelsea.
Mourinho left under a cloud only seven months after winning the title, with the club 16th in the league and only one point above the drop zone, having sacked physio Eva Carneiro and accused some players of "betraying" his work.
When at Real Madrid, he poked an opposition coach in the eye and his frequent outspoken rants against officials and referees had many - Sir Bobby Charlton included - to opine that his behaviour was not befitting of a United boss.
He will also need to disprove the doubters and buck a trend of preferring expensive foreign signings over young homegrown talents and continue our club's ethos and tradition of nurturing and putting faith in youth - Van Gaal's overriding Old Trafford legacy.
Mourinho's old enemy Pep Guardiola takes charge of City in July and Jose's appointment will mean the mouthwatering prospect of the two best bosses in football going head to head in the Manchester derby - and maybe the title - next term.
The future of Van Gaal's assistant Ryan Giggs remains uncertain with the club not mentioning the 42-year-old in any statement and the club legend is known to be unhappy at the manner of the Dutchman's dismissal.
He has now been passed over for the manager's job for a second time and is considering an offer to stay at the club.
Mourinho's first match in the home dugout at Old Trafford will be on 5 June for Soccer Aid- where he will come up against Leicester boss Claudio Ranieri before he locks horns with Guardiola during a pre-season tournament in Beijing.
United have lost their aura over the past few seasons and who better to rediscover it than this serial winner with a strong personality who has finally landed his dream job.