Gattuso has signed a contract until the summer of 2024 with the option for another year.
Marseille parted company with Spaniard Marcelino last week following an unconvincing start to the season.
A 4-0 defeat to Paris Saint Germain last week saw Marseille drop to eighth on the Ligue 1 table.
Gattuso was unattached after leaving Valencia back in January.
The 2006 FIFA World Cup winner only lasted seven months in that role.
Gattuso told the club website: "I am very happy and proud to join Olympique de Marseille. It's a club and a stadium, the Orange Velodrome, where I had the opportunity to play as a player, celebrated throughout Europe for the passion and fervour it exudes.
"I'm looking forward to getting to work with my new team and taking on the upcoming challenges that await us."
Gattuso's first game in charge of Marseille will come against AS Monaco this weekend.
He has previously spent time in charge of Palermo, AC Milan and Napoli.
