Matarazzo succeeds Sergio Francisco, after his dismissal last week. Sergio had been appointed over the summer after Imanol Alguacil chose to leave.
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Matarazzo has signed a contract with La Real to 2027.
Born in New Jersey, Matarazzo, 48, arrives in Spain after his last experience in the Bundesliga at the helm of Hoffenheim, where he coached from February 2023 to November 2024.
He had previously also played a key role at Stuttgart between 2019 and 2022, building a solid reputation in German football.