The Royal Blues will pay Paderborn around 500,000 euros to wrench Breitenreiter away from the relegated club. He is the seventh coach in five years at Schalke, who've changed coaches 13 times in a decade.
Schalke have confirmed Andre Breitenreiter as the club's new head coach on a two-year deal.
The 41-year-old replaces Roberto Di Matteo in the hotseat after the Royal Blues parted company with the former Chelsea boss following a disappointing half-season that saw Schalke finish sixth and miss out on Champions League football.
"We are very happy, in that we've found the right coach for Schalke in Andre Breitenreiter," said the club's sporting director Horst Heldt in an official statement. "After the departure of Roberto Di Matteo, I have emphasized what we expect from our new coach: attractive, passionate attacking football and a team spirit to match the enthusiasm of our supporters."
Breitenreiter was appointed Paderborn head coach in 2013 and won the club's first promotion to the Bundesliga in his first season. Despite eventually suffering relegation on the last matchday of the 2014/15, underdogs Paderborn won many admirers for their positive approach.
"Paderborn have risen sensationally under Andre Breitenreiter who has worked very hard and successfully in spite of extremely modest means," Heldt added.
As a player, Breitenreiter won the German Cup at Hannover, where he made over 100 appearances before moving on to Hamburg and then Wolfsburg. He was capped for Germany's youth squads at U16, U18 and U21 level.