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Schalke have appointed Plymouth Argyle boss Miron Muslic as their head coach on a two-year deal.
The Pilgrims said on Wednesday that the 42-year-old Bosnian-born Austrian would not return to the club after the summer break.
Muslic replaced former England captain Wayne Rooney as Argyle boss in mid-January, with Plymouth bottom of the Championship.
He was unable to stop the club from being relegated from the second tier, despite masterminding a famous FA Cup win over Premier League champions Liverpool.
Muslic joins a Schalke side who finished 14th in the German second tier this season - the club that was a regular in the Champions League and Europa League for the first two decades of this century will start a fourth season in the past five outside of the Bundesliga.
"My thanks go first to Plymouth Argyle, who made it possible for me to hold talks with FC Schalke 04," said Muslic.
"I'm also very grateful to all those at Schalke for placing their trust in me. From the very first contact, we had open and honest discussions."
The former Cercle Bruges boss signed a three-and-a-half year contract when he moved to Home Park, and reports in Germany suggest Argyle will receive 1m euros (£840,000) in compensation.
BBC Sport understands Argyle have already begun the search for their new head coach and have held exploratory talks with a number of potential candidates.
Muslic replaces Dutch coach Kees van Wonderen, who was sacked earlier this month.
In a short statement Argyle said: "We wish Miron all the best for his future endeavours"