Everton have confirmed the appointment of Ronald Koeman as their new manager on a three-year contract.

The Dutchman has been heavily linked with the role over the last few weeks but the deal was believed to have been held up due to the Toffees and his former club Southampton being unable to agree a compensation package.

However, it is believed the two clubs have settled on a figure of £5million, with the Merseysiders’ chairman Bill Kenwright confirming the appointment on Tuesday morning.

Koeman recently led Southampton to sixth in the Premier League table and had suggested he would stay at St Mary’s for next season.

Everton have been looking for a new manager since the departure of Roberto Martinez last month and new owner Farhad Moshiri had earmarked the 53-year-old as his favoured candidate.

The former Barcelona defender is reportedly set to earn £6million a year and is expected to be joined at Goodison by his brother and assistant Erwin as well as fitness coach Jan Kluitenberg.

Kenwright says the Toffees’ board are delighted to have got their man and believes he is the perfect candidate to take the club forward.

“Ronald has such a strong track record in the game, instantly commanding respect for what he achieved as a player and for his qualities and accomplishments as a manager,” he said. “We are really pleased to have secured the man who was our number one target from the moment we set out to appoint a new manager.”

Everton are currently 17.00 to finish in the top four in 2016-17, while Koeman’s former side, Southampton, are 9.00.