Paatelainen, who has had spells managing in Scotland with Dundee United, Hibernian and Kilmarnock as well as in Thailand and his homeland of Finland, has been given a contract until the end of the upcoming UEFA Nations League competition, and replace Aleksandrs Starkovs as national team coach.
Latvia are scheduled to face Andorra, Georgia and Kazakhstan in the new tournament.
It is understood that if Paatelainen leads Latvia to first place in their subgroup, then an automatic contract extension will kick in, keeping him in role until the end of the Euro 2020 qualifiers.
The former Finland boss had been managing in Thailand with Ubon UMT United but is believed to have parted company with the side in January.
Paatelainen’s first matches as Latvia bosswill be against Estonia at the Daugava Stadium in Riga, and Lithuania in Vilnius, in early June. Both matches are part of the Baltic Cup competition.
The Latvians then host Azerbaijan in Riga in a friendly match.
The 51-year-old’s maangerial career began with Cowdenbeath in 2005. Since then he has had spells with TPS, Hibs, Kilmarnock, Finland, Dundee United and UBON UMT United.
Paatelainen is taking the reins at a team currently ranked 139th in the world. The country’s last victory was a 4-0 win against Andorra in October last year.