Girardi replaces Joe Torre, who guided the Yankees to 12 playoffs appearances in 12 seasons but didn't accept a one-year contract offer at the end of the 2007 season.
Girardi, 43, has Yankees ties, having played four of his 15 major league seasons with New York. He was a catcher with the Yankees for the 1996, 1998 and 1999 World Series teams.
He also served as Torre's bench coach in 2005 before taking the manager's position in Florida. He led the Marlins, a young team not expected to do well in 2006, to a 78-84 record and was in the playoff hunt until the final week. He was selected the National League manager of the year but was fired for run-ins with team upper management.
Girardi was selected over Don Mattingly, a long-time Yankees player and Torre's bench coach this past season, and Tony Pena, a former Kansas City Royals manager who was the Yankees' first base coach for the past two seasons.