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Healy, 36, was introduced as the successor to Warren Feeney before Wednesday evening's League Cup defeat by Ballinamallard at Windsor Park.
It is Healy's first managerial appointment since ending his playing career in 2013.
Healy, who scored 36 goals in 95 Northern Ireland appearances, has signed a two-and-a-half-year contract.
The former Northern Ireland striker did not take charge for Wednesday's League Cup game where Jonny Lafferty's 70th-minute goal earned the Fermanagh club a surprise 1-0 win.
Feeney, who guided the Blues to second place in his only full season in charge, quit to take over as assistant manager of Newport County last week.
Former Manchester United, Leeds, Preston, Rangers and Sunderland striker Healy, who was a boyhood Linfield supporter, described accepting the Blues job as a "no-brainer".
"It's an honour and privilege for me to be manager of this football club," Healy told the Linfield website.
"When Linfield approached me, there was only going to be one answer and that was yes.
"To me Windsor Park was my Wembley and to come back here as manager....I just can't wait to get started.
"I'm grateful to the club for showing a lot of faith in me. I'll be working 24 hours a day."
Linfield were top of the Irish Premiership when Feeney stepped down last week although Saturday's 1-1 draw against Glentoran saw the Blues replaced at the summit on goal difference by champions Crusaders.
Northern Ireland's record goalscorer David Healy has been appointed as the new Linfield manager.