Antonio Conte could be in for a rude awakening when he takes over the reins at Chelsea, according to Liverpool legend Graeme Souness.

The Italy coach was confirmed as Chelsea's new manager on Tuesday (AEST) and will take over on a permanent basis after Euro 2016.

Chelsea has endured a nightmare season in which Jose Mourinho was sacked and, while the club has recovered to get back into the top half of the table, it is some way off the heights expected of it and are unlikely to play in the Champions League next season.

Souness said Conte will have his work cut out for him to restore Chelsea as a force in the Premier League.

"I think he's got a monster job on now. Chelsea this year have been disappointing to say the least," he told Sky Sports. "They started as champions and never really got going. When Guus Hiddink came in you thought all their problems would be solved but they weren't.

"They've been up and down all season, even with the lift a new manager gives you.

"I think Jose saw the writing on the wall, he knew he had been lucky to win the league last year, he must have driven them, cajoled them, bullied them, to get to that point to win it, and at the start of the season he wanted more players and better players, and for some reason he didn't get them.

"That must have been the reason he fell out with whoever he ended up falling out with, and that would include the players. Looking back, Jose was right, because that group were not good enough to go and retain the title this year.

"Conte coming in, unless he can go out and buy some real quality, it will be another up and down season for Chelsea."