New Melbourne coach Dean Bailey has described his three-year appointment as a dream come true and the culmination of years of hard work.

Bailey, 40, won the job from a field of five candidates which included former Dockers coach Chris Connolly, Melbourne caretaker coach Mark Riley, Hawthorn assistant Damien Hardwick and Essendon coach Kevin Sheedy.

He has been an assistant coach at Port Adelaide since 2002, during which time Port has played in five final series, including a premiership and two preliminary finals.

He was also a development coach at Essendon when it made consecutive Grand Final appearances in 2000 and 2001. He played 53 games for Essendon from 1987-1992 and 60 games with Glenelg 1993-1996.

"I am excited about the future opportunities with a club that is clearly getting itself out of what has been a challenging period, has some smart and bold ideas, and is committed to getting the results," Riley said.

"The selection process was extremely professional, and the fact I was able to get from responding to their newspaper advertisement to being on a short list with some of the game's most talented people was an honour in itself, but to get the appointment is fantastic.

"I have been privileged to work under Mark Williams at Port Adelaide and have real regrets about leaving that club when it is on the cusp of more success, but nothing is forever in football and I am pleased the club supports me taking this opportunity."

Bailey has been released from his role at Port Adelaide which leave him available to concentrate on his new career with the Demons.

Melbourne chairman Paul Gardner said Bailey's appointment was the result of a disciplined selection process.

"That decision needed to be a very informed one, rather than instinctive or emotionally driven," Gardner said.

"The process we established gave us a fantastic short-list, but it was a unanimous club decision that Dean Bailey will be that coach.

"Dean's approach to coaching and developing players is contemporary, innovative and exciting.

"He has made an enormous effort to develop himself as a senior coach and has benefited from his time with very successful AFL people such as Kevin Sheedy, Mark Williams, Denis Pagan and Alastair Clarkson, as well successful figures at the Institute of Sport, soccer, and basketball.

Gardner said the club appreciated Riley's willingness to take up the caretaker’s role and paid tribute to his work ethic and enthusiasm.

"The club had originally intended to finalise the appointment with Dean over the weekend and inform other candidates, but after Port Adelaide confronted Dean about his future, we had to fast track the process and secure Dean’s services and talk to all other contenders prior to our announcement,” said Gardner.