His impressive start to life as interim coach of Real Madrid has handed him a three year deal which will expire in 2011.
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Solari, 42, took over on 29 October on an interim basis after the sacking of former Spain manager Julen Lopetgui.
He has since led Real to four wins in four games - the best start of any manager in the club's history.
Real had to give Solari - or someone else - the job as Spanish rules prevent an interim coach from staying in charge for longer than two weeks.
Solari's wins in his spell in charge have been against Melilla in the Copa del Rey, Viktoria Plzen in the Champions League, and Real Valladolid and Celta Vigo in La Liga.
In those games, Real have scored 15 goals and conceded two goals.
The club, who confirmed Solari's appointment in a brief statement on their website, were ninth when he assumed control and they are now sixth, four points adrift of leaders Barcelona.