The former Burnley and Everton head coach, 54, is to take the reins to The Reds after former manager Ange Postecoglou, 60, was sacked last week.
Nottingham Forest said in a statement: "Nottingham Forest is delighted to confirm the appointment of Sean Dyche as the club’s new head coach, following a thorough recruitment process led by global head of football, Edu Gaspar, and global technical director, George Syrianos.
"A respected and experienced Premier League manager, Dyche brings the perfect blend of character, tactical acumen, and proven achievement to guide the club through its next chapter.
"Having managed more than 330 Premier League matches, Dyche has built teams defined by defensive organisation, resilience, and strength from set pieces - qualities that align closely with the current squad’s attributes and the club’s footballing identity.
"As a former Forest youth player who lives locally, Dyche has a deep understanding of the values and pride of Forest and its supporters.
"With his character, tactical acumen, and man-management skills, his appointment represents the best opportunity for a successful and competitive season across both domestic and European competitions."
As well as Dyche, former Nottingham Forest players Ian Woan, 57, and Steven Stone, 54, will join the new manager as members of his coaching staff.
The statement continued: "Dyche will be joined by his experienced coaching team of Ian Woan and Steve Stone - both former Nottingham Forest players who collectively made more than 400 appearances for The Reds during the 1990s."
Dyche's debut as Nottingham Forest's new manager will come on Thursday (23.10.25) when The Reds host Porto in the UEFA Europa League, before facing Bournemouth in the Premier League on Sunday (26.10.25).
Nottingham Forest had dropped Postecoglou following The Reds' 3-0 defeat to Chelsea last Saturday (18.10.25).
Under Postecoglou – who took over from Nuno Espirito Santo, 51, last month – Nottingham Forest went on an eight-match losing streak, leaving the club in 18th place in the Premier League.
Postecoglou's tenure as Nottingham Forest's manager lasted 39 days, making his time as head coach is the shortest a manager has served a Premier League club in the tournament's history.