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The 33-year-old has signed a contract extension with the Bundesliga champions until 2026.
Bayern Munich paid Leipzig €25 million in cash, a record payout for a boss, surpassing the €15 million Chelsea paid Porto for Andre Villas-Boas in 2011.
Nagelsmann is due to replace Hansi Flick, who begged Bayern earlier this month to release him from his contract two years before it expired.
“FC Bayern have appointed Julian Nagelsmann as their new head coach.
“The Bavarian-born 33-year-old will move to Munich from RB Leipzig on July 1, 2021 ahead of the new season, signing a five-year-contract with the German record champions until June 30, 2026,” a Bayern statement read.
Nagelsmann was also open to offers from the Premier League. However, with Bayern’s offer on the table, Nagelsmann has agreed to take over his third Bundesliga club.
He joined Leipzig from TSG Hoffenheim in 2019 and led them to the Champions League semifinal in his first year in charge.