"Georgi Ivanov will be Levski coach until the end of the season and we'll have a new coach after that," the club's chief executive Ivo Tonev said. "We'll announce the name of the new coach on April 24."
Levski confirmed that they had held talks with Stanimir Stoilov, who guided the 26-times Bulgarian champions to the UEFA Cup quarter-finals and to the Champions League group stages in 2006.
Former striker Ivanov, 35, replaced Serbian Ratko Dostanic in 2009 on an interim basis and then took the post from Yasen Petrov last May only to quit following Levski's 1-0 defeat by bitter city rivals CSKA in October.
Ivanov, twice Bulgarian Footballer of the Year, knows what awaits him at a club with hugely demanding and impatient supporters.
He became a crowd favourite after scoring a record 15 goals in the "eternal derby", as matches between traditional Sofia rivals Levski and CSKA are known.
Capped 33 times by Bulgaria, Ivanov, who also played in France, Turkey and Croatia, was instrumental in helping Levski to win six league titles and four national cups.
Ivanov, who scored 120 goals in 205 matches during his three spells at Levski between 1997 and 2009, will make his debut on Thursday when the side visit champions Litex Lovech.
Levski are third in the standings with 45 points from 20 matches, three points behind leaders CSKA, who also changed their coach this month.