Via Chelsea's official Web site (be sure to check out the latest news and video on Ancelotti there as well) ...
"The 49-year-old moves to London after eight seasons in Milan where his major successes were two Champions League victories and one Serie A title.
A former Milan player, Ancelotti began his managerial career at Reggiana, a club close to the town of his birth in Northern Italy, where rapid promotion to Serie A for the team meant rapid promotion for his career and a job at Parma - Ancelotti's first club as player.
In the mid-1990s, Parma was one of Italy's high-achievers and had won the 1995 Uefa Cup.
In his first season as coach at the Stadio Ennio Tardini (1996/97), Ancelotti was briefly in charge of Gianfranco Zola and opted to play the Sardinian out wide to accommodate strikers Enrico Chiesa and Hernán Crespo.
Zola soon moved abroad for a never-to-be-forgotten career with Chelsea while Parma enjoyed their best ever league finish - second place, just two points behind champions Juventus.
The next season they dropped to a sixth-place finish and Ancelotti was ruthlessly dismissed.
However he had already done enough to catch the eye of Juventus who would soon need a new man at the helm with the Italian managerial merry-go-round ready to carry Marcello Lippi away to Inter in the summer of 1999.
With Juve destined for only a sixth-placed finish following back-to-back titles, Lippi walked out in February that year and Ancelotti was installed earlier than planned, taking over a Champions League campaign that was eventually ended at the semi-final stage by treble-bound Man United.
Initially the appointment of a former Milan and Roma player was not popular with some of the Juve tifosi and anti-Ancelotti graffiti was seen, but he began a clear out of players, including Didier Deschamps who moved on to Chelsea for one season, and added new faces such as Gianluca Zambrotta and Edwin Van der Sar.
With Zinedine Zidane, Filippo Inzaghi and Alessandro Del Piero providing the cutting edge, Juventus under Ancelotti improved sufficiently for consecutive second place finishes (first just one point then two points off the pace) although no trophies were captured.
At half-time in the final game of the 2000/1 season with the title still technically up for grabs, it was publicly announced that Lippi was to return.
Early the next season Ancelotti was on the verge of rejoining Parma when Milan came calling for one of their own. It was a job he could not refuse.
After scoring the two goals that earned promotion to Serie B for Parma back in 1979, the young midfielder that was Ancelotti in his early playing career moved to Roma where his leadership qualities shined. He captained the side from the capital to only their second title and their first in over 40 years. They also won the Coppa Italia four times in his eight seasons there.
His subsequent Milan playing days coincided with that most golden spell at the San Siro - the Gullit-Van Basten-Rijkaard era when two European Cup Finals and the domestic title were won.
Ancelotti played in both the successful finals in 1989 and 1990 and scored in the 1989 semi versus Real Madrid. He played for the host nation at the 1990 World Cup and in total won 26 Italy caps.
The Milan he returned to as coach had not won silverware for two seasons and had finished as low as sixth the previous year. The season before they were the bottom side in a Champions League group which was topped by Chelsea.
Steady Serie A progress was made with a fourth-placed finish followed by third place in his first full season until the Scudetto was captured in 2003/4 by the mighty margin of 11 points.
That remains the one domestic title the new Chelsea coach has won although with justification he can point to the muddied waters of Serie A in the mid-part of this decade which saw Juventus stripped of two titles due to match-fixing by club officials, Milan having finished second in 2004/5, a season for which the record books now show no championship awarded.
The Rossoneri were implicated to a far lesser extent than Juve, and with no suggestion that players or coaching staff were involved, and were handed an eight points deduction for the 2006/7 campaign, one in which they finished fourth.
That was the season of their second European Cup win under Ancelotti's, the first giving him revenge on the club that had disposed of his services so brutally when at Old Trafford at the end of his first full Milan season, the 2003 Champions League was won at Juventus's expense. Andriy Shevchenko slotted home the shoot-out decider and thus made his manager one of only six to have lifted the European Cup as both player and coach.
They are still asking themselves in Italy how the feat wasn't repeated in Istanbul two years later, a 3-0 half-time lead over Liverpool dissolving and Shevchenko this time failing with the final penalty.
Again though, Ancelotti was allowed the last laugh when after another two-season wait, his captain (and former playing colleague) Paolo Maldini lifted the trophy in Athens following a 2-1 win over Liverpool.
In total at Milan he has won one League title, two Uefa Champions Leagues, two Uefa Supercups, one Italian Cup, one League Supercup and one Fifa Club World Cup.
Last season's fifth place was the only finish outside of the Champions League qualification places (this season Milan finished third) and in over the years accommodating creative talents Manuel Rui Costa, Kaka, Andrea Pirlo, Ronaldo, Rivaldo, Ronaldinho and Alexandre Pato among others, his sides have often been considered more adventurous than many in Serie A.
In a notoriously short-lived league for managers' jobs, Ancelotti was the longest-serving prior to his decision to join Chelsea."