"[Boca] members and supporters, Carlos Bianchi has accepted the club's proposal and will again be Boca's coach," the team from the port district of Buenos Aires said on their Twitter and Facebook accounts.
"It's a great joy that the most winning coach in our history is returning to Boca. We wish him the greatest success."
The 63-year-old Bianchi, a former Velez Sarsfield, Paris Saint-Germain and Argentina striker, steered Boca to four Argentine league titles, three Libertadores Cups and two Intercontinental Cup victories in two spells in charge between 1998 and 2004.
He replaced Julio Cesar Falcioni whose contract was not renewed.
Argentine media said Bianchi, who is to be officially unveiled at Boca on Wednesday, would sign a contract for three seasons.
Bianchi, who began his coaching career in France, steered his former club Velez to three Argentine league titles, the South American crown and the Intercontinental title between 1993 and 1996.
He then joined Boca for the first time in 1998 after a brief and disappointing stint at AS Roma.
The man nicknamed Virrey (Viceroy) proceeded to earn status as a Boca idol, picking up three league crowns, two Libertadores Cups and an Intercontinental Cup victory over Real Madrid in 2000 before leaving in 2001.
He returned two years later and led Boca to the fifth of their six Libertadores Cup victories and another Intercontinental Cup triumph over AC Milan.
He had a season in charge of Atletico Madrid in 2005/06 and spent nearly two years as Sporting director at Boca in 2009 and 2010.
As a player, Bianchi was top scorer in the Argentine league in three seasons and in France in five including four in a row between 1976 and 1979.
Diaz led River to five domestic and two regional titles between 1996 and 2002 and fans will be excited at the prospect of them coming face to face again in the Argentine "Superclasico".
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