Sunderland chairman Ellis Short said: "Paolo is hugely enthused by the challenge that lies ahead of him. He is passionate, driven and raring to get started.
"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."
The former Labour Party leadership candidate said: "In the light of the new manager's past political statements, I think it right to step down."
Di Canio has admitted to having fascist leanings, telling Italian news agency ANSA in 2005: "I am a fascist, not a racist."
Speaking half an hour before Di Canio's appointment, former Swindon chairman Jeremy Wray told BBC Radio 5 live: "I think it's a great appointment. He'll galvanise the team. If you're looking for a catalyst for change, he's the right man.
Paolo Di Canio denies Reading and West Ham links
"It's where's he's always wanted to manage and it's a very astute appointment."
The Italian first came to Britain in 1996 when he joined Celtic as a forward, and followed his time in Glasgow with spells at Sheffield Wednesday, West Ham and Charlton.
Di Canio spent 21 months at the County Ground. After
and with Swindon in the League One play-off positions, he
quit the Robins
on 18 February after becoming frustrated by off-the-field issues.
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