"Nigel has enjoyed managerial success in the game. He knows how to inspire first team players to give their all and has a proven track record of making an academy a key ingredient to the club's success.
"We count ourselves lucky to have Nigel aboard."
Former England international forward Clough started his managerial career with Burton Albion in 1998 after a successful playing career that took in stints with Nottingham Forest, Liverpool and Manchester City.
Pat MurphyBBC Radio 5 live
I understand Clough is attracted by the potential at Sheffield United and, despite their parlous position in League One. was impressed by a crowd of over 18,500 last Saturday for the home match against Port Vale.
Clough was United's number one target but they've had to wait until his compensation claim - and that of his four backroom staff - against Derby County was settled.
Having guided the Brewers to the top of the Conference Premier, he left to take over Derby in January 2009, following in the footsteps of his late father Brian, who managed the club to the league title in the 1970s.
He was charged with cutting the wage bill and rebuilding the club after a disastrous one-season spell in the Premier League in 2007-08, where they had finished with a record low 11 points.
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