“While I have enjoyed being at Everton, I have been presented with an unexpected opportunity which I believe is the right move for me and my family at this time,” Ancelotti said in a statement on Everton’s website.
Ancelotti is Madrid’s coach with the most wins in his first 100 competitive games at the helm of the Spanish powerhouse, with 78.
“The Italian returns to our club after rewriting the history books during his first spell in the Real Madrid hot seat,” Madrid said in a statement. “The new coach boasts vast experience and an impressive trophy haul.”
Ancelotti joined Everton in December 2019, taking over from Marco Silva. The club finished 12th in the Premier League last year, before a 10th-place finish in Ancelotti’s only full season in charge.
Zidane, who led Madrid to three consecutive Champions League titles from 2016-18, quit last week saying he didn’t have the support of the club for a long-term project.
Zidane’s Madrid fought for the Spanish league title until the final round but finished two points behind city rival Atlético Madrid, failing to defend its title and lift back-to-back league trophies for the first time since 2007-08.
In the Champions League, Zidane led the team to the semifinals, but it was eventually eliminated by Chelsea. In the Copa del Rey, Madrid lost to third-division club Alcoyano in the round of 32.
Other coaches who had been touted to replace Zidane included Antonio Conte, Mauricio Pochettino, Xabi Alonso and Raúl González.