"Paulo Bento will arrive in Brazil on Monday and his contract will be until December 2017," the club said in a statement on Thursday.
The 46-year-old replaces Deivid de Souza who was fired after 18 games because he failed to lead Cruzeiro into the final of the Minas Gerais state championship.
Bento led Sporting between 2005 and 2009 before being appointed national team coach. His Portugal side were knocked out of the 2012 European Championship by Spain at the semi-final stage.
(Writing by Andrew Downie; Editing by Tony Jimenez)
