The 40-year-old replaces Juan Antonio Pizzi, who was sacked on Wednesday. Nuno, a former Porto goalkeeper, is expected to install his Rio Ave coaching staff, including Dundonian Ian Cathro, at the Mestalla.
Cathro, who was heavily involved in the development of Sporting Lisbon's new £3m signing Ryan Gauld, is understood to have travelled to Spain yesterday for talks with Valencia. If he does join the La Liga club it will continue a remarkable rise into the top echelons of European football for the 27-year-old; just over two years ago he was a Scottish FA regional performance coach.
Cathro's first experience of first-team football was when he joined Nuno at Rio Ave at the start of the 2012-13 season, but despite initially speaking no Portuguese he was an integral part of a coaching team which took the tiny Primeira Liga club to the finals of both national cup competitions earlier this year.
They lost both to Benfica, but nevertheless Rio Ave qualified for the Europa League for the first time in the club's history.
Pizzi was an immediate victim of the new regime despite only joining the 2004 Spanish champions in December last year. The club finished eighth in La Liga, although did reach the semi-finals of the Europa League, losing on away goals to eventual winners Sevilla.
At his press conference yesterday, Nuno said: "It isn't easy, but we have the conviction we are going to achieve things. We all have the dream of fighting with the biggest clubs in Europe.
"Next year we have to be in the Champions League and I am convinced we will be there. My responsibility is to build a team capable of winning every game."