'Afshin the Emperor' has reportedly signed a contract with Foolad.
Foolad is ninth in Iran Professional League (IPL) with 15 points from 14 matches.
The 54-year-old coach replaced interim coach Aziz Farisat.
Ghotbi has signed an 18-month contract with Foolad.
Ghotbi claimed the IPL title with Persepolis in 2008 and headed Iran national football team in 2011 AFC Asian Cup.
Ghotbi has also coached Shimizu S-Pulse of Japan, Thailand’s Buriram United and Shijiazhuang Ever Bright from China.