By Helen Fawkes
BBC News, Kiev
It is a dramatic comeback for the man who was defeated by Ukraine's so-called "Orange Revolution".
Mr Yanukovych returns to the office he held in 2004
Viktor Yanukovych, a pro-Moscow opposition leader, has been approved as prime minister.
Mr Yanukovych was the disgraced loser of the presidential election almost two years ago. Allegations of major vote-rigging sparked mass protests.
Ironically his nomination was approved by his arch-rival President Viktor Yushchenko, the man who led the popular protests and promised closer ties to Europe.
It is a bitter twist for many who took part in the Orange Revolution.
"This is a terrible day for Ukraine. We didn't spend weeks protesting for this to happen. I fear that we will fall under Russia's influence again," says Masha Konovalova, a mother of two from the capital Kiev.
"We had such hopes, but now we have to say the Orange Revolution is over, because Yushchenko has done a deal with the enemy."
But not everyone sees this as a betrayal.
It is hoped that it will end the political crisis that followed an inconclusive but free and fair ballot in March.
The turmoil led to fist-fights in parliament.
"I voted for Yushchenko's party at the election but I'm frustrated with all politicians. They behave like clowns in a circus," says Oleg Yusov, a lawyer who works in Kiev.
After months of talks a pro-Russian coalition was eventually formed.
Mr Yanukovych draws his support mainly from Ukraine's southeast
It put forward Mr Yanukovych as its candidate for prime minister.
In an echo of the Orange Revolution, hundreds of its supporters were brought to the capital. They have been camped outside parliament for weeks.
Most carried brightly-coloured flags and they were entertained with pop music.
"He got the most votes so, of course, Yanukovych should be our prime minister," says Vadim Golovan, a student from the Crimea as he packs away his tent.
UKRAINE'S PACT - KEY POINTS
Ukraine to remain unitary state
Ukrainian is only state language
Goal of WTO membership by end of 2006
Goal of EU membership
Referendum on Nato membership
Constitutional reform - "checks and balances" system
"There's no doubt that he will be good, as he is a strong leader. We need him as our country is a mess because of the Orange Revolution," he adds.
A team of US advisers helped Mr Yanukovych to rebrand his image following his humiliation in the presidential vote in 2004.
One of them summed up Thursday's developments as "stunning".
Now the two Viktors will have to work closely together, but it looks like Mr Yanukovych will have the upper hand.
Political reforms mean that the new prime minister will have increased powers.
Also Mr Yanukovych's popularity has grown, while support for the president has shrunk to less than 10%, according to opinion polls.
21 Nov 04 Yanukovych declared winner of presidential election - protests begin
3 Dec 04 Election annulled
11 Jan 05 Yushchenko declared winner of re-run election
8 Sep 05 Yushchenko sacks Tymoshenko government
26 Mar 06 Yanukovych party wins most votes in general election
3 Aug 06 After four-month deadlock, Yushchenko agrees Yanukovych can be PM
"Yanukovych appears to be the winner out of the crisis and Yushchenko the loser. It's Yanukovych who has shown much more leadership," says Tammy Lynch, a Ukraine analyst based in Kiev.
The president only agreed to nominate Mr Yanukovych after they came to an agreement on national unity.
Mr Yanukovych committed himself to continuing the president's pro-Western agenda.
A senior Western diplomat told the BBC that they would now be watching closely, warning that Mr Yanukovych must demonstrate through actions and not just words that he is committed to the democratic changes brought about by the Orange Revolution.