Paulo Fonseca was hired as AC Milan’s coach on Thursday and charged with forming a more competitive challenge to city rival and Serie A champion Inter Milan, according to AP.

Fonseca, who signed a three-year contract, replaces Stefano Pioli, who left the club at the end of the recent season after a nearly five-year stint that included the 2022 Serie A title.

Milan finished second in Serie A last season but was a distant 19 points behind Inter. Milan was routed by Inter 5-1 in the derby in September and lost the second meeting 2-1 in April.

Under Pioli, Milan ended a seven-year absence from the Champions League in 2021 and reached the semifinals last year, losing to Inter.

This past season, Pioli’s team failed to advance from a tough group that included Borussia Dortmund, which ended as runner-up, and Paris Saint-Germain. Milan then switched to the second-tier Europa League and was eliminated by Roma in the quarterfinals.

Fonseca coached Roma from 2019-21. The Portuguese manager’s most recent job was at Lille, having gained attention for his performance at Shakhtar Donetsk from 2016-19.