The 43 year old had previously been in charge of the club’s youth academy before bedimming assistant manager under Brian Tinnion in 2004.
Millen told City’s official website: “I’m excited but I’m still getting over the shock really.
“I knew I wanted to do the job and last season I enjoyed it. For certain reasons I decided to step aside from it and I was looking forward to working with Steve.
“I did enjoy working with him and we are still friends. We met last night (Wednesday), when he told me the news. He apologised for leaving me in this situation.
“I know Bristol City fans like to see entertaining football; I’ve been here long enough to know what their expectations are. I’ve got high expectations as well.
“I’ll be looking to bring an assistant in and that’s going to be an important appointment.
“I’m not going to come in here talking promotion and play-offs, I’m concentrating on doing my best for Bristol City football club.”