The Basque coach, who has managed Middlesbrough, Birmingham and Nottingham Forest, will have his first test in charge of the Andalusian side on Wednesday when they travel to play Atletico Madrid at the Wanda Metropolitano.
After that game, which will come after barely having had time to introduce himself to his squad, Karanka will have five games to try to save Granada from the drop to LaLiga SmartBank.
Karanka's arrival confirms the departure of interim boss Ruben Torrecilla, who was unable to turn the team's bad run around and leaves after five games in which he won one, drew one and lost three.
Granada currently sit in 17th place, just above the drop zone but level on points with Mallorca below and Cadiz above them. Levante and Alaves in 19th and 20th respectively are only four points behind. The LaLiga Santander relegation battle looks set for a nail-biting finish that will go down to the wire.
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