The former West Ham and Celtic forward joins on a two-and-a-half year deal in charge of the relegation-battling English Premier League team - but his arrival has sparked political controversy.
Sunderland appoint Paolo di Canio as replacement for Martin O'Neill
Paolo di Canio has been appointed as Sunderland's new head coach after owner Ellis Short moved quickly to replace Martin O'Neill.
But the move has sparked controversy, with club vice chairman and former British Government minister David Miliband resigning from the club in protest at Di Canio's political affiliations.
The 44-year-old Italian made an acrimonious departure from his previous role as manager at third tier club Swindon Town in February, and has no top flight managerial experience.
But despite that Short believes Di Canio, Sunderland's fifth manager in four years, is the man to take the club forward following O'Neill's spell in charge.
"Paolo is hugely enthused by the challenge that lies ahead of him. He is passionate, driven and raring to get started," Short said on the club's website.
"The sole focus of everyone for the next seven games will be to ensure we gain enough points to maintain our top-flight status.
"I think that the chances of that are greatly increased with Paolo joining us.
"Our fans have shown tremendous patience and understanding this season. They have continued to back the team in huge numbers, both home and away, and that is something that continues to inspire all of us in our drive to give them the successful club they deserve.
"That remains our primary aim."
Sunderland have just seven games remaining and has not won in their last eight league matches. They currently sit in 16th place, just one point above the relegation zone.
Di Canio's arrival immediately saw the departure of the former UK foreign secretary from the club, because of the Italian's admission of having fascist leanings.
Miliband confirmed he was resigning from his post as the vice-chairman and non-executive director at the Stadium of Light due to Di Canio's 'past political statements'.
"I wish Sunderland AFC all success in the future," he said in a statement on his website.
"It is a great institution that does a huge amount for the North-east and I wish the team very well over the next vital seven games.
"However, in the light of the new manager's past political statements, I think it right to step down."
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