The television channel BeInSport, also owned by the club's Qatari owners, let the cat out of the bag last Friday, announcing an "agreement" between the French champions and Blanc.
The club wrote on its official website: "Paris Saint-Germain is delighted to announce the appointment of Laurent Blanc as coach for the next two years. He will take charge of the squad on 1 July 2013 for the start of pre-season training.
"The board of Paris Saint-Germain has given Laurent Blanc the mission to build on last season and to continue the club's ascendency towards the summit of the European game."
PSG's announcement came just moments before Real Madrid said that Carlo Ancelotti would take over from Jose Mourinho at the Bernabeu.
Blanc, 47, has been out of a job since leaving his role in charge of the French national team following their disappointing quarter-final exit at UEFA EURO 2012.
The former defender, who won the FIFA World Cup™ with France in 1998, has previously had professional coaching experience at Bordeaux from 2007-10, leading them to the Ligue 1 title in 2009.
Ancelotti had been a target as Mourinho's replacement after announcing in May that he wanted to leave the Parc des Princes after 18 months in charge. PSG have reportedly been linked to a number of coaches since then, including Mourinho before his move back to Chelsea, Rafa Benitez before he headed to Napoli, and Russia's Fabio Capello. Tottenham Hotspur manager Andre Villas-Boas was also said to have been in the frame.
Blanc was also said to have been in talks with Roma until the Serie A side chose former Lille boss Rudi Garcia.
Ibra future in doubt
PSG begin their their title defence against the 2011/12 champions Montpellier and are likely to be challenged by newly-promoted Monaco, who have spent heavily since winning Ligue 2, and perennial rivals Marseille.
The capital club last year made it to the quarter-finals of the Champions League but were beaten on aggregate by Barcelona. Their progression - and first domestic title in 19 years - was seen as a sign of a return on their investment.
But a question mark remains over star player Zlatan Ibrahimovic, who said in May that he may not stay at PSG if Ancelotti left. The Sweden international has two years to run on his contract.