Former Sevilla coach Michel has signed an 18-month deal and will be officially unveiled on Monday.
"Olympiakos would like to announce that the new coach of the team, the Spaniard Michel, will be presented to the media..." the club said in a short statement.
The 49-year-old former Spanish international was sacked by Sevilla on Jan. 14 following a poor run of form and replaces interim coach Antonis Nikopolidis, who took over at leaders Olympiakos last month following the sudden departure of Leonardo Jardim.
Nikopolidis will remain at the club as part of coaching staff.
Olympiakos spurned a 2-1 halftime lead against Atromitos having recovered from going a goal behind with strikes from Algerian duo Rafik Djebbour and Djamel Abdoun.
Thanasis Karagounis's superb long range strike three minutes after the break pulled the determined visitors level before an equally breathtaking effort from Elini Dimoutsos 10 minutes from time sealed a surprise famous win.
Olympiakos lead second-placed Asteras Tripolis by a healthy 13 points after Asteras were held to a 2-2 home draw by Panathinaikos on Saturday.
A much-improved Panathinaikos twice went ahead through goals from impressive Ivory Coast forward Ibrahim Sissoko, but the Greens were pegged back both times, first by Ruben Rayos Serna and then Emmanuel Perone's last-minute penalty.
Panathinaikos remain in seventh place, 25 points behind arch rivals Olympiakos but one point away from the playoff places.
AEK Athens's recent good form continued with a 1-0 win over Panionios at the Olympic Stadium on Saturday to help Ewald Lienen's side climb further away from trouble.
Captain Roger Guerreiro scored the only goal of the game in the 12th minute to secure three points for AEK, who are now 12th.