The 44-year-old today quit as manager of Scottish Premier League side Kilmarnock to take up the role, which he will assume with immediate effect.

"It's wonderful having such a challenge," said Paatelainen. "This is a dream."

He takes over a side languishing in fifth place in Group E of Euro 2012 qualifying, having taken three points from their opening four games.

Olli Huttunen and Markku Kanerva have led the side on an interim basis following the departure of Stuart Baxter five months ago but Paatelainen was always the first choice of the Finnish FA.

The organisation's president Sauli Niinisto said: "We are very pleased that we got the top name on our list."

The former Dundee United, Aberdeen and Hibernian striker took over as manager of Kilmarnock in June 2010.

He had been out of football since leaving his role as Hibs boss the previous year.

Paatelainen took over a Kilmarnock side who had battled relegation in previous seasons and earned plaudits for the transformation at the club under his charge.

He was voted Clydesdale Bank Premier League manager of the month for December and leaves the Ayrshire outfit in fifth position in the SPL.

His efforts at Rugby Park did not go unnoticed and he was recently linked with a move to Scunthorpe United.

However, the lure of managing his national team proved too much to resist and he will take charge of his first match when Finland face San Marino in June.