Glenn Roeder has been confirmed as full-time manager of Newcastle on a two-year contract.
The club decided to appoint Roeder after a successful spell in charge as caretaker boss following the departure of Graeme Souness.
Roeder does not have the required UEFA Pro Licence but a vote of Premier League chairmen cleared the way for his appointment.
Roeder told the club's official website, www.nufc.co.uk: 'It's hard to describe how I feel at the moment.
'I know all about this club, having played here for almost six years and having captained the club.
'I'm an extremely lucky person to have been given this opportunity, and it is an opportunity I want to take.'
Chairman Freddy Shepherd also confirmed today that striker Alan Shearer, who retired at the end of the season, will act as sporting ambassador for the club.
The 50-year-old, who had been the Academy coach at St James' Park, took charge in February and lifted the club from the bottom half of the table to seventh place in the Barclays Premiership.
Roeder will now take the UEFA course to ensure he has the necessary qualifications to manage in the top flight this time next year. His appointment has been strongly opposed by the League Managers' Association.
Roeder had previously enrolled on such a course during his time at West Ham but could not complete it due to health reasons.
The former Hammers boss, who only returned to St James' Park last summer, described his elevation as a 'dream come true'.
He added: 'I had almost six years here (as a player), and that was an enjoyable time.
'I was aged 33 when I left, and I would have liked to have stayed longer.
'I said that so many times, and if I was ever asked to spend the rest of my life in Newcastle then that wouldn't have been a hardship, that would have been a pleasure.
'But to get the opportunity to come back here last July was great for me. I was happy with the opportunity to live here again, never mind managing the club.
'When came up here as a player, I suppose that having an ambition of managing the team wouldn't have been an option.
'As I went on, and you had asked me a couple of years down the line, I'd have said I'd like to be a manager here one day.
'Now it has happened, it shows that dreams do come true.
'If you work hard and fight for the dream, it proves that anything in life is possible and when the opportunity comes along you have to be ready for it.
'I'm looking forward to the next few seasons now, and I think it is going to be an exciting time for everyone connected with this football club.'
In a press conference televised by Sky Sports News, Roeder continued: 'I had no doubt in my own mind to take one game at a time.
'But privately the longer I was working with such quality players here reminded me how much I enjoyed working with senior players.
'I hoped the chairman would give me an opportunity to state my case as manager and he did - but he made me wait quite a long time.
'We are building towards the future and we want to carry on where we left off last year.
'I'm happy to be offered two years - if I had been offered a longer contract I may have been uncomfortable - but this keeps everyone on their toes.
'Hopefully I can bring a cup back to St James' Park. The support I've had has been brilliant.
'They know I've been here before and have a feel for the club and I'm really looking forward to working for them over the next couple of years.
'Newcastle was the best club I played for and to be asked to manage Newcastle is an amazing achievement.'
Roeder, who had neuro-surgery in 2003, added: 'What's happened today should give hope to everybody - the impossible can happen.'
Shepherd, referring to the criticism of Roeder's appointment by LMA chief executive John Barnwell, added: 'Glenn has maintained a dignified silence throughout.
'We looked at other candidates and other applications came in.
'But Glenn is the highest-placed English manager in the Premiership this year and we feel he deserves the job.'
The chairman insisted a top-six Premiership finish is required of Roeder, adding: 'We've got to achieve that.'