Former head coach Jesse Marsch left the team in November after a single season. The split followed a difference of opinion with team management over how the soccer club should move forward.
The Major League Soccer club will introduce Schällibaum, 50, at a news conference Tuesday at Saputo Stadium.
“I am very pleased and proud to be the head coach of the Montreal Impact,” Schällibaum said in a statement released by the club.
“From our very first discussion, I felt confidence with the management. The club is passionate about the game, like me, and is made up of people who are passionate as well and who want to go in the same direction," he said.
Impact president Joey Saputo said the decision was a culmination of a long and exhaustive process. He said from day one of meetings, both parties felt comfortable with one another.
Schallibaum coached nearly 10 years with five clubs in the Swiss Super League and spent the last two years as a FIFA coaching instructor in Asia.
He also played 15 seasons in the Swiss league and won three championships. Schallibaum played 31 games for the Swiss national squad.
The new coach speaks French, English, German and Italian.