"AS Monaco is delighted to announce the appointment of Leonardo Jardim as new head coach for the next two seasons, 2014-2015 and 2015-2016, and one-year option," Monaco said in a statement.
"The Portuguese coach will take charge of the squad on June 30 for the start of pre-season training."
Jardim, who coached Sporting Lisbon last season, replaced Italian Claudio Ranieri who left after two seasons in charge, 12 months before his contract was due to expire, despite leading Monaco to second place in Ligue 1 and a place in next season's Champions League.
Monaco, who under Russian billionaire Dmitry Rybolovlev splashed out more than €100 million on transfers last year, finished the season on 80 points, nine adrift of champions Paris St Germain.
Jardim quit Sporting in May after leading them to second place in the Portuguese league and direct qualification for the Champions League group stage next season.
"I am very happy to work for Monaco as it is a big club," he said. "I fully believe in this project and I think that this group can go far. AS Monaco is a team with players full of quality. There are many young players with a lot of talent."
Jardim also said he was taking French lessons so that he could hit the ground running when the season starts.
"It is question of respect towards the supporters, and the people of Ligue 1," he added.
Born in Venezuela to Portuguese parents, Jardim has made a habit of changing clubs frequently.
Since 2008, he has had one season with Chaves, two with Beira-Mar and one each with Braga, Olympiakos Piraeus and Sporting.
- Sports & Recreation
- Leonardo Jardim