The Calgary Flames have officially announced that he'll replace head coach Jim Playfair, who will become an associate coach with the team.
"Together, they will do remarkable things for this team," Flames GM Darryl Sutter said at a news conference Thursday.
Keenan joins his eighth NHL team as either a coach or general manager. He last worked in the league for the Florida Panthers but abruptly resigned as GM in September 2006 with more than two years remaining on his contract. It's believed he was forced out due to differences of opinion on personnel with his head coach Jacques Martin.
He's agreed to a three-year deal with the Flames.
"I'd love to stay here and end my career here," Keenan said.
Keenan said the opportunity to work with Sutter again was a big factor in his decision to take the job.
"That had everything to do with it, to work with people that you know and share the same vision," said Keenan. "We've been to games in the finals before and we got close to the job that was unfinished. Hopefully we're in a position now that we can go to that same spot and finish it off."
Keenan, 57, gave Sutter his first NHL coaching job when he was the GM in Chicago.
Playfair's head coaching tenure in Calgary lasted just one year. The Flames finished eighth in the Western Conference this season before being eliminated in the first round by Detroit.
"I thought Jimmy did a really good job but I wasn't sure that everybody else did," Sutter said of this past season. "With that, comes change."
Playfair joined the Flames as an assistant coach under Sutter in 2002 before being promoted to the head job before last season. Playfair decided to stay on with the team in his role as associate coach.
"This has been a tough process for him to go through," said Keenan. "There's a lot to be said about a man who can make those types of choices with his family."
Playfair said it was "an easy decision" to stay with the Flames.
"This is the next step for our organization to find a way to make sure we prepare ourselves as well as we can to win the Stanley Cup," he said. "It's not anything more than that."
Keenan has 569 wins, 447 losses, 140 ties and 20 overtime losses in 1,014 games over his career.
He captured the Jack Adams trophy, awarded to the league's top coach, in 1985 while leading the Philadelphia Flyers to the Stanley Cup final. He also coached the New York Rangers to their first championship in 54 years in 1994.
"I think Mike's record speaks for itself," said Sutter.