Former Glasgow strategist Martin O'Neil stepped in to lead Birmingham amid disagreements on Friday.
The 54-year-old Irishman left the Scottish club after five years at the helm in May 2005, stating that he wanted to spend more time with his seriously ill wife.
"It's fantastic to return. It's a fantastic challenge," O'Neil said at a press conference on Friday. "I can't wait to get started."
O'Neil replaced David O'Leary at the helm of Aston Villa, who left the club by mutual agreement last month after long-time club president Doug Ellis faced public criticism from players.
O'Neil stated that his goal is to restore glory to the 1982 European champions, who have not won a title in ten years.
"Everyone knows the club's history so well. It seems like it was so long ago, so why not try?" the Irishman rhetorically asked. "A quarter of a century has passed since the triumph in Europe, and it will take some time before we win something, but that is my dream."
O'Neil mentioned during the press conference that he has "a bit of money" for new signings.
Meanwhile, talks about a possible change in ownership of Aston Villa continue. American billionaire Randy Lerner and an English consortium have been trying to acquire the club for some time. Birmingham club president D. Ellis, who controls a controlling stake in the club's shares, stated that "negotiations are ongoing" but did not reveal details.