The experienced Dutchman replaces Gus Poyet, who was sacked on Monday following the Black Cats' humiliating 4-0 home defeat by fellow relegation battlers Aston Villa.
Thegoalmac reported on Monday that Sunderland had already lined up a replacement for Poyet before sacking the Uruguayan and the club have moved swiftly as they seek to preserve their Premier League status.
Advocaat has enjoyed a distinguished coaching career of more than 30 years including successful spells with PSV, Rangers and Zenit St Petersburg, but has never managed in the Premier League.
“Sunderland is a big club and I am very much looking forward to the challenge ahead,” he told the club's official website.
“We must now concentrate on Saturday as a priority and I can’t wait to get started.”
Advocaat will be joined at the Stadium of Light by Zeljko Petrovic as first-team coach and former Swansea City goalkeeping coach Adrian Tucker while, as revealed by Goal on Monday, academy coach Paul Bracewell will also support his backroom team.
Sunderland owner Ellis Short added: “Dick has an incredible CV and vast experience of managing at the very highest level. We have one aim only now - to climb the table and everyone is fully focused on the task ahead of us.”
Saturday's defeat to Villa leaves Sunderland 17th in the Premier League with 26 points from 29 games, just one point above the relegation zone.
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