Capello won two consecutive league titles at Juventus

The Spanish club's new president Ramon Calderon confirmed Capello's arrival on a three-year deal.

The 60-year-old Italian, who quit Juventus on Tuesday, has returned to the club where he won the La Liga title in 1996-97 - his only season in charge.

"This is the most important club in the world. I am really looking forward to starting work with the team that we have planned," Capello said.

"We have to be humble and recover the spirit that has always distinguished those wearing Real Madrid colours.

"In recent years, this spirit has been lost. If we are able to recover it, the titles will come very soon."

This is the most important club in the world Fabio Capello

Calderon said: "He is a winner, and this is very important at this club after three years without a title."

With his coach in place, Calderon immediately outlined his plans to end Real's trophy drought, pledging to sign AC Milan's Brazilian playmaker Kaka, Arsenal's Cesc Fabregas and Arjen Robben from Chelsea.

He added: "The three currently have contracts at their respective clubs, and we need to get in touch with them."

Capello's departure from Juventus came as a prosecutor called for the Italian champions to be demoted from Serie A at a sport tribunal investigating match-fixing claims.

If they are relegated, a host of top players could follow him out of the door, including goalkeeper Gianluigi Buffon, who kept Italy in the World Cup with a crucial save against Germany on Tuesday.

Capello began his managerial career at AC Milan, where he won four league titles and the European Cup, before leaving for his brief but successful stint with Real.

Calderon has got his man

He joined Roma in 1999, winning the Serie A title two years later, but eventually left for Juventus in 2004, clinching back-to-back titles in his first two years in charge.

He also enjoyed a successful playing career as a striker, scoring eight times in 32 appearances for Italy and winning four league titles - three with Juventus and one with Milan.

During his time in management, Capello has been renowned as a strict disciplinarian, something Calderon believes will be vital to Madrid success.

"He will ensure there is discipline, preparation and planning, something that this club has lacked in recent years," the new president said.