Andries Jonker has left his role as Arsenal's academy manager to become Wolfsburg's third boss of the season, after the sacking of Valerien Ismael.
Dutchman Jonker returns to Wolfsburg three years after leaving his role as assistant manager to join Arsenal.
"I've remained in contact with Wolfsburg, but the inquiry did come as a bit of a surprise," said Jonker, 54, at a news conference on Monday.
Former Arsenal forward Freddie Ljungberg will be Jonker's assistant.
Jonker takes over with Wolfsburg two points above the relegation zone.
"This is a huge challenge," he added. "All that counts is getting the 40 points as quickly as possible."
Ismael was sacked on Sunday - two days after a 2-1 home defeat by Werder Bremen, their fourth loss in five league games, left them on 22 points with 12 games remaining.
He was initially appointed on an interim basis after Dieter Hecking, now at Borussia Monchengladbach, was sacked seven games into the Bundesliga season.
Wolfsburg are 14th in the 18-team table.
Jonker's first match in charge is at 11th-placed Mainz on Saturday (14:30 GMT).