“Granada CF announces the hiring of Abel Resino as the red and whites’ new coach until next June 30,” the club said in a statement on their website.
The 51-year-old, who also played in goal for Atletico, would oversee his first training session on Tuesday before being presented to the media, they added.
Resino, whose latest coaching job was at second-division Real Valladolid, was hired by Atletico in February 2009 to replace Mexican Javier Aguirre.
He engineered a late surge to grab fourth place in the league and a slot in the Champions League playoff round before being let go after a poor start to the 2009-10 campaign.
Gonzalez, known as Fabri, was dismissed on Sunday following Saturday’s 3-0 defeat at Espanyol which left Granada one point above the La Liga relegation places.
He led the Andalusians back to the top flight after a 35-year absence, winning consecutive promotions from the third tier and the second division.
Saturday’s reverse was their third in a row, including a 5-1 drubbing at leaders Real Madrid, and their fifth in seven games.