Shastri replaced Anil Kumble, who exited after a much publicised difference of opinion with captain Virat Kohli.
Making for a star-studded coaching team, former speedster Zaheer Khan took over as the bowling coach while Rahul Dravid was handed over additional responsibility of a batting consultant on specific overseas tours.
"On Cricket Advisory Committee's recommendation, we have decided to appoint Ravi Shastri as the chief coach while Zaheer Khan will be appointed bowling coach for a period of two years till 2019," BCCI acting president CK Khanna confirmed the development to PTI.
"Rahul Dravid will also help the senior team as a batting consultant on overseas tours -- specifically to countries like South Africa, England and Australia," Khanna added.
The development ended the drama surrounding the appointment since BCCI had to refute reports which prematurely announced Shastri as the chosen candidate.
It wasn't an easy decision for the three-member Cricket Advisory Committee comprising Sachin Tendulkar, Sourav Ganguly and VVS Laxman.
It has been learnt that it was a tough fight between Shastri and Sehwag but it was skipper Virat Kohli's strong recommendation about Shastri's successful earlier tenure that swung the deal in favour of BCCI's 'Man for all seasons'.
According to highly-placed sources, former captain Ganguly had reservations about Shastri's appointment but was finally convinced by his illustrious colleague Tendulkar, who wanted the team's wish to be respected.
It was learnt that Shastri however didn't get his choice of bowling coach -- Bharath Arun -- where Ganguly pulled a coup by getting Zaheer on board.
"Sourav was brought around and convinced about Ravi after it was agreed that Zaheer would be made the bowling coach. Zaheer is such a name that no one could have possibly objected to due to his repertoire of knowledge and a fantastic relation with the current crop," a BCCI official told PTI on conditions of anonymity.
It could be safely said that BCCI GM (Administration) MV Sridhar and CEO Rahul Johri also spoke to Zaheer during their recent trip to West Indies, where the Delhi Daredevils captain cum bowling coach was present as a commentator for the host broadcaster.
The 38-year old Zaheer played 92 Test matches and 200 One-day Internationals in his magnificent career. The left- armer took 311 wickets in Tests and 282 in ODIs.
In the 17 T20 internationals for India, he had 17 scalps.
For Shastri, it will be a sweet homecoming - his third stint with the national team. The 55-year-old former India captain has earlier been a Cricket Manager during 2007 tour of Bangladesh and then Team Director from 2014 August to 2016 June.
It was a productive stint for the Indian team during which they won Test overseas series versus Sri Lanka, reached the semi-finals of 2015 World Cup and World T20 semi-finals in 2016. They also won overseas ODI series in England and T20 series in Australia. They won a Test series against South Africa.
"Shastri has been the Team Director in the past, and brings with him a wealth of experience, both as player and as coach," BCCI acting secretary Amitabh Chaudhary was quoted as saying in a media release.
On Zaheer's appointment, Chaudhary said, "Khan is a contemporary cricketer who assumed the mentoring role to a young fast bowling unit even during his playing days with India. His inputs will be of immense value to our young fast bowlers, who have shown tremendous potential in the last couple of years."
Shastri was all set to get an extension last year when Anil Kumble threw his hat in the ring and Shastri despite a great performance was dumped.
His exit was followed by a public spat with CAC member Ganguly, whom he accused of not being present during his interview.
Ganguly in turn retorted by saying that had he been serious, Shastri should have not attended an interview while holidaying from Bangkok.
However the wheels have turned quickly after Kohli-Kumble relationship turned sour.
It was then that BCCI decided to invite fresh applications knowing that Kumble was living on borrowed time.
During the initial phase, Shastri didn't apply but when the deadline was extended, he threw his hat into the ring.
Known as players' man and a fantastic manager, Shastri was considered an astute tactician during his playing days, a skipper India never had. His relationship with both former skipper MS Dhoni and captain Virat Kohli has been great.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)