Daniel Stendel will take permanent charge of Hannover having signed a two-year contract despite the club's relegation from the Bundesliga.
Hannover sacked Thomas Schaaf on April 3 after a 3-0 defeat to Hamburg left the club 10 points adrift of safety with six games remaining.
Youth coach Stendel took over and, although he was unable to save the club from dropping into the second division, will continue at the helm.
"It will be a challenge. The task is incredibly attractive and I am pleased and delighted that my management gives confidence," he said.
"It's great fun to work with this team and Hannover is much more than a normal employer for me.
"The anticipation of the remaining games in the Bundesliga and the coming season in the second tier is huge."
Stendel played for Hannover between 1999 and 2006 and managing director Martin Bader stressed the importance of keeping people who understand the club involved.
"Daniel knows the club and the environment very well. He is Hannover through and through," he said.
"With the firm commitment to Daniel Stendel we aim to stress the importance of our identification with, and emotional understanding for, the club."