The former Uruguay midfielder will take over a side with just one point through seven matches.
Sunderland tab Poyet as manager
Poyet, a former Uruguay midfielder, has been out of work since being fired by English second-tier team Brighton in June.
On a two-year deal, Poyet takes over a Sunderland side bottom of the Premier League with just one point after seven matches.
Chairman Ellis Short, said: "We analyzed a wide range of candidates and believe that Gus's track record, experience, commitment and passion make him the right man to take us forward."
Poyet spent his peak playing years with Zaragoza, Chelsea and Tottenham before becoming assistant manager to Dennis Wise at Swindon Town in 2006. He followed Wise to Leeds United before Tottenham hired him to work under Juande Ramos in October 2007.