The Carrow Road outfit were looking for a new boss after Paul Lambert left to join Aston Villa, and have confirmed that the role has been filled.
Hughton led the St Andrews club to the playoffs in 2011-12, but lost out to Blackpool in the semi-finals.
The new man has admitted that he is excited by the opportunity and is grateful for the chance to manage back in the Premier League.
“It’s a good feeling. It’s something I’ve been very excited about and something that has materialised over the last couple of days – it’s been very speedily dealt with, which I’m delighted about. I’m looking forward to the challenge in front of me,” he told Sky Sports.
“It’s a wonderful job in the Premier League and is one that very much excited me. But I shall forever be grateful to Birmingham for the time I spent there.
“The job that Paul has done here and the club have done here in the last few years, it’s a wonderful achievement to rise from the third division, through the Championship and into the Premier League.
“For somebody in management, it’s a tough task and everyone appreciates the job he has done here. It’s a hard act to follow but it’s about a challenge and it’s about making progress as football club.
“It’s about stability in this division, making progress and with every new manager and new player comes a new challenge. That’s what I have got to look forward to,” he admitted.
By Gareth McKnight