Farke was recently dismissed as manager of Bundesliga side Borussia Monchengladbach after just one season in charge following a 10th place finish.
The German comes in as a replacement for Sam Allardyce, whose short stint in charge of the Elland Road outfit could not inspire the needed changes to avoid relegation from the Premier League.
Farke has a rich experience in the Championship, having led Norwich City to two promotions from the second tier of English football.
Leeds United will hope Farke can produce some magic to ensure a swift return to the Premier League.
Farke’s first game in charge of Leeds will come against Cardiff City on August 6.
Farke told the club website: “I’d like to thank everyone for the really warm welcome, I’m really grateful at this moment, to work for this amazing club.
“I feel humble at this time, I know the responsibility to fulfil all the expectations and I want to repay the trust shown.
“The most important thing is to create a togetherness and unity within this club again and from today onwards, I will work on it with my staff and players, and I trust our supporters will be there when we need them. I can’t wait for the first game of the season.”
Director Paraag Marathe added: “After a thorough recruitment process, we are excited to confirm Daniel’s appointment as our first team manager.
“His record in the Championship is clear, and I am impressed by his leadership and plan to guide us back to the Premier League.
“We welcome Daniel and his staff to the club and look forward to a strong season.”
