Voro Gonzalez was placed in charge of Valencia on an interim basis for the seventh time.
Los Che have now given the job permanently to one of their former stars. Baraja is joined by another Valencia legend Carlos Marchena as part of his coaching staff.
The former midfielder will start work in the coming days and will be in the dugout when they play Getafe on Monday.
Valencia are 18th in La Liga after 21 games, with one point separating them from safety. They have lost all their three league games since Gattuso was sacked on January 30.
The last time Valencia found themselves in the drop zone was in 1986, and they were relegated.
They will hope Baraja can help them stay up given his experience. He has managed Real Zaragoza, Tenerife, Real Sporting de Gijon, Rayo Vallecano and Elche.
Baraja was once in charge of the Valencia youth team and briefly worked temporarily as Valencia B boss.
‘Pipo’ knows all about the club and could be the man to finally get the best out of the players. As a player, he won two La Liga titles, a UEFA Cup, a European Super Cup and a Copa del Rey with the club.
Valencia have won just five games this term and suffered 11 defeats. Gattuso took over from Jose Bordalas last June but did not live up to expectations.
Baraja needs to hit the ground running and start producing the goods.
A victory in the six-pointer next Monday will be a huge boost ahead of a tough run. Valencia meet Real Sociedad and Barcelona after playing Getafe.
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