The hugely successful 59-year-old, who had been linked to the England manager's position which becomes vacant after this year's World Cup, said he was more interested in coaching Russia's team.

"I am very proud that I can give my contribution to develop Russian football and make Russia a great football country again because the potential is enormous," Hiddink told reporters.

"If I didn't believe in success I shouldn't have come here. I am very ambitious to be successful with all the people here in Russia.

"They are on the edge of a new period."

Hiddink will get 2 million euros (2.42 million dollars) a year as coach plus a bonus linked to results.

Russian soccer chief Vitaly Mutko said the package was partly funded by Russian billionaire Roman Abramovich, who owns English Premier League champions Chelsea.

Hiddink said he turned down approaches from England's Football Association to take over from Sven-Goran Eriksson when the Swede quits his role as England coach after the World Cup.

"England was mentioned. There were some contacts between me, my agents and some people at the FA ," Hiddink said. "But I was curious about the Russian challenge. At the end I didn't have any doubts."

Hiddink, who has promised to try and learn Russian, said he had been watching the team on DVDs and was impressed by their potential.

"There is a lot of technical potential in the national team and if players are aware of their potential then they can increase their level," Hiddink said.

"From what I can see and smell from the DVDs there are some players who have indeed the potential to be leaders."

Mutko said he had high expectations for Hiddink, who led the Netherlands and South Korea to the semifinals of the last two World Cups and will be in charge of Australia in this year's event in Germany.

"We want to return our team to the glory days of the Soviet Union," Mutko said.