Current Socceroos and PSV Eindhoven coach Guus Hiddink has promised to restore Russia to their former international glory after signing a contract to become the Russia national team head coach.

The hugely successful 59-year-old Dutchman, who had been touted as a successor to Sven Goran Eriksson as England manager 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 on Friday.

“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 reportedly receive a salary of 2 million euros (£1.4 million) a year as coach, plus a bonus plan linked to results.

Russian Football Union President Vitaly Mutko confirmed that the salary package was partly funded by the owner of the English Premier League champions Chelsea, Russian billionaire Roman Abramovich.

Abramovich, thought to be Russia's richest man, is financing an ambitious programme designed to lift Russian football back up to a level that they haven’t seen since the collapse of the former Soviet Union.

Russia had been looking for a successor to former Russia coach Yuri Semin, who quit his job as Russia head coach in November following their failure to qualify for the World Cup finals in Germany this summer after coming third in Group 3 in the Europe Zone qualifiers behind Portugal and Slovakia, who managed to win the play-off spot on goal difference to the Russians.

The Russian Football Union had appeared set to offer South Korea’s coach Dick Advocaat the coaching role, until Abramovich reportedly contacted the RFU, and recommended Hiddink for the role, while also saying that he would fund all of his wages.

Abramovich has close ties to PSV Eindhoven, through their close working relationship with Chelsea, and it seems this is where his admiration of Hiddink has stemmed from.

Hiddink also said he turned down approaches from The FA 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 ,” said Hiddink. ”But I was curious about the Russian challenge. At the end I didn't have any doubts.”

Hiddink said he had been watching the Russian 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,” said the Dutchman.

“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 semi-finals 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.

In March, Hiddink announced his intention to leave the part-time Australia post and his full-time job at PSV Eindhoven, after a season in which they have already retained the Dutch Eredivisie league title.