"Claudio Borghi, the man with most victories in the history of Argentinos Juniors, is once again coach of "El Bicho" (the bug)," the club based in the Buenos Aires barrio of La Paternal said on Sunday.
"The trainer will sign a contract until June 2015. La Paternal is partying," they said on their website.
Borghi, a talented striker in Argentina's World Cup-winning squad in 1986, helped Argentinos win Argentine league titles in 1985 and 1985, followed the same year by the South American Libertadores Cup.
The 49-year-old, who had a disappointing spell at Boca which lasted 14 matches after winning the Clausura title with Argentinos in 2010, has been out of work since being sacked by Chile in 2012 midway through the South American World Cup qualifiers.
Borghi will travel to Buenos Aires from Chile, where he has lived moistly since retiring as a player at Santiago Wanderers, in the coming days to sign for Argentinos.
He will replace Ricardo Caruso Lombardi, who leaves Argentinos in the bottom three of the relegation standings based on teams' average points over three seasons with the threat of the drop in May.
"Argentinos needed to make a strong statement for the fight in the next tough semester and that was Claudio Borghi's return," the club said, calling the news a Christmas present for the fans.
Borghi is the second coaching change in the Argentine top flight in mid-season.
San Lorenzo, who won the Inicial (former Apertura) championship this month, have lost coach Juan Antonio Pizzi to Valencia with Edgardo Bauza taking charge for the Final championship in February.
Bauza has the pedigree to try to fulfil San Lorenzo's dream of winning the Libertadores Cup for the first time, having turned LDU Quito into the first Ecuadorean side to win South America's elite club trophy in 2008.