It comes after the firing of Bill Cartwright following a 4-10 start.
"It's a challenge that I look forward to and I am eager to get at it," said Skiles, a native of LaPorte, Ind. "I'm looking forward to working with (General Manager) John Paxson. I have a great deal of respect for him."
Paxson vowed Monday that the dismissal of Cartwright that "(it) represented the first change, but not necessarily the last."
Skiles, 39, may be the tough-minded disciplinarian Paxson is seeking. Many believed Cartwright was too soft on his players, seven of whom were born in the 1980s.
He compiled a 116-79 record in 2 1/2 seasons as coach of the Phoenix Suns, but probably is best known for his intense demeanor as a player and coach. He reportedly clashed with Jason Kidd and Rodney Rogers in Phoenix before resigning as coach during the 2000-01 season.