The former Wales boss becomes the Black Cats’ ninth manager in the last six seasons and replaces Simon Grayson, who was sacked at the end of last month.
A club statement read: “Sunderland AFC are delighted to announce Chris Coleman as the club’s new manager.
“The Welshman has signed a two-and-a-half-year deal at the Stadium of Light and arrives on the back of six memorable years as Wales boss, during which time he managed his country into the top 10 of FIFA’s world rankings and an incredible run to the semi-finals of Euro 2016.
“The 47-year-old was highly sought-after but chose Sunderland as the fifth club of his managerial career, following spells with Fulham, Real Sociedad, Coventry and AEL.”
Coleman takes over a club in crisis with Saturday’s 2-2 draw with Millwall giving them an unwanted English record of 20 consecutive home games without a win.