The Grosso deal was agreed in principle several weeks ago but was delayed while he completed his exit from US Sassuolo.
Vanoli took charge at the Stadio Artemio Franchi in November 2025, inheriting a side that had failed to win any of their opening 10 Serie A matches under predecessor Stefano Pioli. He guided them to safety in a performance that club president Giuseppe Commisso acknowledged was extraordinary.
In his farewell message, Commisso said: "I want to personally thank Paolo Vanoli and his entire staff.
"They arrived at an extremely difficult moment in our season, with the team at the bottom of the table and still without a win, and they had the strength, seriousness and courage to lift the group back up.
"They restored belief, unity and togetherness, guiding Fiorentina to safety under conditions from which no team had ever before managed to avoid relegation in Serie A history. Paolo and his staff will always have my gratitude, my respect, and my very best wishes for the future."
Grosso, 48, is a 2006 World Cup winner with Italy — famous for scoring the decisive penalty in the final against France in Berlin — who guided Sassuolo to promotion from Serie B in his first season and then an 11th-place finish in Serie A this campaign. He has also managed Juventus's Primavera side, Bari, Hellas Verona, Brescia, Sion, Frosinone and Olympique Lyonnais.
The appointment is driven in significant part by Fiorentina sporting director Fabio Paratici, who gave Grosso his first coaching role in the Juventus youth system. The two-year deal includes an option for a third year, and Grosso's formal announcement is expected imminently now that his Sassuolo contract has been terminated.