Solari has also enjoyed a stint at Real Madrid as a player. He spent five seasons at Bernabeu from 2000 to 2005
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The 42-year-old has signed a contract which keeps him at the club till June 30, 2021.
Solari has already recorded victories as Real Madrid manager.
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In his spell in charge, his side have beaten Melilla in the Copa del Rey, Viktoria Plzen in the Champions League and Real Valladolid and Celta Vigo in La Liga.
In those games, Real Madrid have scored an impressive 15 goals and conceded just two goals.
Before taking the interim role, he was Real Madrid Castilla manager.
Solari has also enjoyed a stint at Real Madrid as a player. He spent five seasons at Bernabeu from 2000 to 2005, most notably winning La Liga (x2) and UEFA Champions League.
