One of Europe's top coaches, Blatt was hired Friday by the Cavaliers, who ended a sweeping, 39-day search with an out-of-the-box selection they hope changes their fortunes.
American-born, Princeton-schooled and considered one of the game's brightest offensive minds, Blatt, 55, has long been interested in coaching in the NBA, and the Cavs will give him his first shot.
Blatt was given a three-year deal worth about $10 million with a fourth-year team option that includes incentives, sources told ESPN.com.
Cleveland contacted high-profile college coaches and interviewed both retreaded head coaches and on-the-rise assistants before zeroing in and landing Blatt, who won several European titles while coaching in Israel and guided Russia to a bronze medal at the London Olympics two years ago.
"David Blatt is going to bring some of the most innovative approaches found in professional basketball anywhere on the globe," Cavs owner Dan Gilbert said. "Time and time again, from Russia to Israel and several other prominent head coaching jobs in between, David has done one thing: 'win.' He is not only an innovator, well-trained and focused on both sides of the court, but he is always learning and always teaching."
Blatt will be introduced by the team Wednesday, one day before the club picks first in this year's NBA draft.
Cleveland's third coach in three years, Blatt replaces Mike Brown, who was fired -- for the second time -- on May 12, a few weeks after the Cavs finished 33-49 and missed the playoffs for the fourth straight season. Blatt was not believed to be on Cleveland's radar early in its search, but that changed when he resigned at Maccabi Tel Aviv to pursue an NBA gig.
"I couldn't be more excited about the opportunity to come to Cleveland and lead the Cavaliers as their head coach," Blatt said. "We are going to work extremely hard to achieve the kind of results we all expect and know are possible."
Blatt also was coveted as an assistant by Golden State and Minnesota, but the Cavs made him the first European coach to make the jump to the NBA as a head coach.
"David is a great basketball coach and a special person," Cavs general manager David Griffin said. "His abilities to communicate, to build relationships with his players and to foster winning environments at several stops throughout Europe and across the highest levels of international competition speak for itself. He brings unbridled passion, energy and creativity to his craft.
"I have watched David's work for many years. He has an uncanny ability to adapt his system to maximize the talents of his teams year after year. That is why I am very confident he will make a smooth transition to the NBA."
With Blatt in place, the Cavs can focus their attention on next week's draft.
As agent Mike Tannenbaum was negotiating Blatt's contract, Griffin and the rest of Cleveland's front office got a closer look at Duke forward Jabari Parker, who worked out at the team's training facility in Independence, Ohio. Parker is one of the Cavs' options with the No. 1 pick, a selection they are determined to get right.
Last year, the Cavs selected forward Anthony Bennett with the top choice, but he had a disastrous rookie season that began with him coming into training camp out of shape after undergoing shoulder surgery.
Cleveland had been strongly considering Kansas center Joel Embiid, but he underwent foot surgery Friday and estimates on his return range from six months to a full season. Taking Embiid, who missed the end of his freshman year with a back stress fracture, would be risky, and the Cavs are more likely to go a safer route and select Parker or Jayhawks forward Andrew Wiggins, who visited the team earlier this week.
It's also possible the Cavs could trade the pick, and Griffin has said the team will listen to offers.
With free agency to follow the draft, Cleveland's roster could have a very different look by the time Blatt holds his first practices.
Blatt played point guard at Princeton under legendary coach Hall of Fame coach Pete Carril, whose pass-and-cut offense has often been mimicked. Blatt has incorporated elements of the Princeton system into his offense.
His style with Cleveland will be vastly different than the team experienced under Brown, who improved Cleveland's defense this season in his second stint with the club. However, the Cavs' offense rarely flowed and the team was prone to empty possessions, turnovers or poor shot selection.
Blatt led Maccabi Tel Aviv to a stunning upset of Real Madrid in this year's Euroleague championship, and in the celebration afterward, Israeli Prime Minister Benjamin Netanyahu pleaded with him to stay. But the chance to coach in the NBA was too much to resist, and Blatt, who emigrated to Israel after college, will return to live in the U.S. for the first time in 30 years.
Cleveland is his new home.
The Cavs can only hope he stays a while.
Information from ESPN.com's Brian Windhorst and Jeff Goodman and The Associated Press was used in this report.
David Blatt To Coach Cavaliers
Brian Windhorst discusses the news that David Blatt has reached an agreement to become the Cavaliers' coach.