Hughes has signed a two-and-a-half-year contract with The Paraders, who are 15th on the league two table and parted company with Derek Adams nearly two weeks ago.
Hughes had been out of management since being sacked as Southampton manager in December 2018.
The 58-year-old former Manchester United, Barcelona and Bayern Munich striker has previously been in charge of Blackburn Rovers, Manchester City, Fulham, Stoke City and Queens Park Rangers.
"I am really pleased to be here and am looking forward to the role, and the job in hand. It has been an exciting few days,” Hughes said following his appointment.
"It is maybe a little bit of a surprise that I have come in, but do not be put off by that!
"I am here for a reason: to make Bradford City a team people want to come and watch - and are proud to watch.
"The supporters come in their numbers, and that is the thing I have missed since being out of management. I am looking forward to the matchday, getting that adrenaline flowing and interacting with the crowd.
"Certainly, from now until the end of the year, we just want to finish strongly and see where that takes us.
"We want to move the club and everybody with it forward, and hope we can have the success everyone wants."
Hughes’ first game in charge of Bradford will be against Mansfield Town on Saturday.
