The Cottagers boss was reportedly on the shortlist to replace current head coach Louis van Gaal at the end of the current campaign.
However the Bundesliga outfit have decided against the former United man and have opted for Heynckes after he announced his refusal to extend his current contract at Bayern Leverkusen.
Overlooked: Hughes has missed out on the Bayern job after the club appointed Heynckes
Leverkusen are currently second in the Bundesliga and ironically Leynckes' side could edge out Bayern for an automatic qualification spot for next season's Champions League.
Bayern who clinched the League and Cup double last season have had a miserable year and currently sit 4th in the Bundesliga, fourteen points behind leafers Borussia Dortmund with seven matches to play.
Van Gaal's side lost in the semi-finals of the German Cup to Schalke and then saw any chance of silverware end when they were knocked out of the Champions League by Inter Milan following a dramatic second leg, that saw the Italians win 3-2 after Goran Pandev's winner with two minutes remaining.
Back once again: Heynckes during his second spell with Bayern
That has led to calls for a change and Bayern chairman Karl-Heinz Rummenigge gave his backing to Heynckes appointment: 'Jupp Heynckes was our preferred candidate.'
The Leverkusen coach has agreed a two-year contract and was delighted with his return to Munich. He said: 'I was already twice coach at Bayern and I always liked the work atmosphere there.'
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