Atletico Junior win Colombian Apertura
"I've come to build a team because that's the only way to win championships," Paez told reporters.
"That's how I've always worked and you can be sure we'll construct a great team to return Millonarios to the place where they belong," added the 57-year-old after signing a deal for one year with an option to renew for a second season.
Paez has been a key figure in the progress Venezuela have made on the South American stage in the last decade.
Millonarios, who last won the league in 1988, launched the great Alfredo Di Stefano to fame in the 1950s.