Birmingham have appointed the former West Ham and Watford manager on a two-and-a-half year deal after sacking Gary Rowett earlier today.
Rowett's sacking came as a surprise to many given that he had led Birmingham to seventh in the Championship, just one place and one point off the play-offs.
The Championship side's club director, Panos Pavlakis, said: "We are delighted to welcome Gianfranco and his backroom team to the Club.
"His pedigree, philosophy and ambition fits with what we would like to achieve as we move in a new direction.
"Gianfranco has a wealth of top-level experience as both manager and player and we are extremely excited about his appointment".