Former Liverpool boss Rafael Benitez has been appointed as new manager of Merseyside rivals Everton.

The 61-year-old has put pen to paper on a three-year deal with the Premier League club and replaces Carlo Ancelotti, who made a shock return to Real Madrid on June 1.

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Sources told ESPN earlier this month that Benitez was in talks to take charge at Goodison Park but faced competition from Roberto Martinez, Eddie Howe and Nuno Espirito Santo for the vacant position.

"You can see the ambition is there," Benitez told Everton TV. "This club is growing.

"For me, it is about bringing the winning mentality, being competitive, so everything is in place on the pitch and off the pitch. I love the passion of the people behind the club. I know the city, I know Scousers, I know what it means for every fan here to compete and to have the chance to win.

"To come to Everton is something that means a lot, for sure. You can see the ambition of the owner, of the board, everybody wants to be better and to go to the new stadium with a massive boost. I like to compete. I like to win. I came from the academy at Real Madrid [as a young player and coach], and the winning mentality is already there.

"We [Benitez and the coaching staff] have won 13 titles because we have this mentality and I still want to win. And I have come to Everton because I liked the idea to be competitive again -- and to have the chance to compete in every game, to compete against anyone."

Everton's majority shareholder, Farhad Moshiri, added: "Rafa impressed us greatly with his knowledge and experience but, above all, the passion and hunger he showed to join our club. We are appointing Rafa because we believe he will bring success to our Club and to Evertonians.

"To put it simply -- we need to be competing at the top end of the league and to be winning trophies. Rafa is a proven winner with huge experience in coaching internationally and we have secured the best man to achieve that for us."

The appointment is a controversial one, as Benitez spent six years at Anfield, winning the Champions League, FA Cup and UEFA Super Cup during his spell.

During his time at Liverpool, Benitez described Everton as a "small club," but he has since claimed that his remarks were misinterpreted.

It is not the first time Benitez's appointment has caused controversy after he temporarily took charge of Liverpool's rivals Chelsea in 2012.

The Spaniard has been out of work since leaving Chinese team Dalian Professional in January.

Benitez has an impressive track record of winning trophies during his managerial career after leading Valencia to two La Liga titles and a UEFA Super Cup.

He also won the FIFA Club World Cup with Inter Milan, the Coppa Italia with Napoli and the Europa League at Chelsea. Benitez has also managed Real Madrid and Newcastle United.

Everton will be hopeful Benitez can help the club lift their first major trophy since 1995.