The 54-year-old Israeli makes his return to Fratton Park after leaving the club in July 2007 to become director of football at Chelsea before succeeding Jose Mourinho as manager at Stamford Bridge.
Despite leading Chelsea to the Champions League Final and to within two points of the Premier League title, Grant was sacked following the conclusion of the 2007-08 season.
Portsmouth’s financial future had been hanging in the balance before it was announced late on Monday evening that the club had been taken over by al-Faraj, a Middle Eastern businessman.
Grant joins the club as they lie at the foot of the Premier League table, having secured their first win of the season under manager Paul Hart at Wolves on Saturday.
Pompey’s number one, David James, was full of praise for the club’s newest recruit, who will have an identical role to that which he played when he was last at Portsmouth.
“I love Avram, he’s a great guy,” said James. “When I first joined the club he was there and he was very active in preparation for matches. He’s a very wise man; his football knowledge is immense. It’s a very good move.”
Portsmouth’s will host Tottenham Hotspur at Fratton Park when the Premier League resumes after the International break.
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