"I am honoured and privileged to have another chance to coach an international team, particularly a team of the ilk of Australia," said Arthur, who coached South Africa from 2005 until 2010.

Since then he has worked with Western Australia.

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"I think I bring a fresh, unblinkered eye to the role after plotting against Australia when coaching South Africa and having now worked within the Australian system with the Western Warriors," he added.

"Australia has an abundance of cricket talent and I am confident the talent is there to ensure Australia is successful."

The announcement came hours after the Australians chased down a target of 310 in Johannesburg to beat South Africa and share their two-match Test series where Troy Cooley was in the role of interim coach.

Cooley had made clear he would not be applying for the head coach job, with former Test wicketkeeper and NSW coach Steve Rixon seen by many as the frontrunner.

Tom Moody and Justin Langer were also candidates, but Arthur won the race.

His appointment follows recommendations by the Argus Review, sparked by the team's humiliating 3-1 Ashes series defeat to England this year and aimed at getting Australia back to the top of world cricket.

Chief selector Andrew Hilditch and fellow selector Greg Chappell were high-profile casualties of the seven-month probe, headed by Don Argus, the former chief of mining giant BHP Billiton.

Based on the findings, a new chairman of selectors, former Test batsman John Inverarity, was appointed on a full-time basis last month. Hilditch had been part-time.

Ex-rugby union international Pat Howard was also picked as general manager for team performance -- a new position recommended by the review, with Arthur to report to him and Cricket Australia chief executive James Sutherland.

Howard said Arthur was the best man for the job, found after what he said was a global search and review of a long list of Australian and overseas candidates.

"Mickey impressed on a number of levels, including his proven ability to turn teams around, and his deep knowledge of the Australian cricket scene and its current and prospective future international players across three formats," Howard said.

Arthur will sit on the board of selectors with Inverarity, captain Michael Clarke, Rod Marsh and Andy Bichel, and face some immediate selection issues, most notably the future of Ricky Ponting.

A huge question mark hangs over the former skipper despite his fighting 62 against South Africa on Sunday -- his first knock of more than 50 in 15 innings.

"I'll defer that to the first selection meeting," Arthur said.

"It's hard coming in from the outside without knowing what is going on. That's something for John Inverarity to take up."

Arthur, who hit 6,657 first-class runs before retiring in 2001, has been contracted until 2015.

This will take him through to the next ICC World Cup in Australia and New Zealand in 2015.

Australian cricket is undergoing a transitional period following the retirement of greats such as Shane Warne, Matthew Hayden, Glenn McGrath and Adam Gilchrist.