Leonardo was on Wednesday officially presented as the new sporting director of Paris Saint-Germain, ending weeks of speculation about the management structure at the newly rich French giants.
Leonardo's arrival was made possible by the departure of Robin Leproux, who revealed earlier in the day that he had been removed from his position as club president.
Former PSG financial director Benoit Rousseau was named as an intermediary successor to Leproux.
"It's been a bit mad recently," said Leonardo, who spoke in flawless French during his introductory press conference at Parc des Princes.
"Lots of things have happened."
The former Brazil international, a World Cup-winner in 1994, returns to PSG having starred for the club during the 1996-97 season but admitting that leaving his position as coach of Inter Milan had been a wrench.
"It wasn't easy to leave Italy. There was a bit of confusion," he said.
"I'm really happy because I was chosen by people who really want to do something special. I'm happy to be a part of this project."
Speaking about his previous time at the club, he said: "It was 14 very intense months and it was very difficult to leave Paris. I didn't expect to come back like this. Today, being here makes me really happy."
The 41-year-old will reportedly work as a director of football with sweeping powers over player recruitment, while head coach Antoine Kombouare retains responsibility for first-team affairs.
"Leonardo will be an English-style general manager," said senior club official Simon Taher.
Leonardo's appointment came hours after the decision to remove Leproux from his functions.
Leonardo is believed to have held out for Leproux's departure as a condition of his arrival, as his desire to have complete power over transfers would have intruded into Leproux's remit.
Leproux announced earlier on Wednesday that he had been removed from his position less than a month after Qatar Sports Investments (QSI) took over as majority shareholders of the club.
"I have been removed as president," said Leproux.
"My first thought is for the future of PSG. I tried with all of the teams that I directed to develop this club and work as seriously as possible.
"From the bottom of my heart, I hope that the management team will have tremendous success."
QSI completed a deal on June 30 that gave them 70 percent of the shares of the club.
Leonardo met four days ago with QSI president Nasser Al-Khelaifi and the Qatar Crown Prince Tamim Al-Thani in London, telling them he would not come to Paris until the question of Leproux's future had been resolved.