Wayne Rooney left his role as DC United boss on Sunday
The 37-year-old former England captain has joined the Championship club on a three-and-a-half-year deal.
Rooney succeeds Blues head coach John Eustace, who was sacked on Monday after 15 months in charge.
The ex-Everton and Manchester United striker's appointment is the first managerial change made by Blues' new American owners Shelby Companies Limited since they took over in July.
Rooney will be supported by his former England team-mate and current England Under-21 assistant Ashley Cole and his old United colleague John O'Shea, the assistant coach of the Republic of Ireland men's national team.
Carl Robinson and Pete Shuttleworth will also be part of Rooney's backroom staff after both assisted him at DC United.
It will be Rooney's third job in management following spells at the MLS club and Derby County and his first game will be at Middlesbrough on 21 October.
"Wayne is a born winner," Blues co-owner and chairman Tom Wagner said.
"We believe, with the support of his coaching staff, the club, and our supporters, he will take Blues forward on the next stage of our journey.
"His playing philosophy will help to realise the ambitions we have set for Birmingham City.
"Wayne has been preparing for an opportunity like this since he embarked on his coaching education whilst still a player at Manchester United.
"He and his staff have the full support of the board and everyone at the football club."
-- Courtesy of BBC Sport