He takes over from Sean Dyche, who was sacked two months ago.
Premier League winning captain Vincent Kompany's returning to England to manage Burnley.
The former Manchester City skipper will attempt to lead the club back into the top flight following their relegation to the Championship.
Kompany recently left his job as boss of Belgian side Anderlecht.
Burnley have been without a permanent manager since sacking Sean Dyche two months ago.