The 45-year-old has agreed a two year contract and will be joined at Sunderland by his backroom staff Mauricio Taricco and Charlie Oatway.
Sunderland chairman Ellis Short said: “We analysed a wide range of candidates and believe that Gus’s track record, experience, commitment and passion make him the right man to take us forward.
“We welcome him to Sunderland.”
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Summer 2016 is set to be a very exciting time for football fans, as this is when the long awaited Euro 2016 tournament kicks off.
Since Guus Hiddink arrived at the helm, Chelsea have improved considerably after a tricky start to the campaign.