Rumours had been rife before the appointment that 61-year-old Bielsa, who was at the helm of Argentina and Chile before successful stints at Athletic Bilbao and Marseille, would join the team.
Bielsa is said to have inspired the likes of Jorge Sampaoli, Diego Simeone, Mauricio Pochettino and Pep Guardiola, who in 2012 described Bielsa as the best coach on the planet.
"He could coach any club anywhere so the fact he chose us adds dimension to our project here," Lille's new owner Gerard Lopez told AFP. "His recruitment is the first concrete step of everything we have promised to do here," added the Luxembourg-Spanish tycoon.
Lille were champions of France in 2011 but since then they have only twice finished in the top three. Bielsa, who has not coached since leaving Marseille in August 2015, is known for the high playing lines of his sides and demanding a prodigious work rate of his teams.
His dynamic style inspired Athletic Bilbao to a Europa League final in 2012 and it fired Marseille for half of the 2014-15 season before they ran out of steam and allowed Laurent Blanc’s Paris Saint-Germain to pip them to the championship.
He left Marseille in a flurry of fury in August 2015, one game into the 2015-2016 season. In July 2016, he quit the Serie A club Lazio 48 hours before he was supposed to start angered by what he called broken promises over player recruitment.
"Those exits don't worry me at all," Lopez said. "Bielsa is a professional and those were clearly justified decisions for specific reasons."
After 26 of the season's 38 games, Lille are 14th in Ligue 1 four points above the drop zone. Despite their precarious position, they were taken over three weeks ago by Lopez, the former owner of the Formula One team Lotus.
He has recruited Franck Passi - Bielsa's assistant at Marseille - to oversee the rest of the season and keep the club from dropping into the second division.