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"After a thorough search, [GM Trent Balke] and I are thrilled to announce Chip Kelly as the new head coach of the 49ers," 49ers CEO Jed York wrote.
After being fired by the Philadelphia Eagles prior to the end of the season, Kelly had said that his preference was to remain in the NFL.
The 49ers job was one of just four teams with coaching vacancies that had been linked to Kelly, inlcuding the Tennessee Titans, New York Giants, and Cleveland Browns.
Kelly was one of two finalists for the 49ers job, along with former Broncos and Redskins coach Mike Shanahan, according to Adam Schefter of ESPN.