Rooney agreed to a 3 1/2 year contract with the Blues, who play in the Championship, a second-tier league in England.
"I am absolutely delighted to be joining Birmingham City Football Club at such an exciting time," Rooney said in a news release. "It is very clear that they have a plan and are committed to realizing their ambition for the club. We are fully aligned on what is expected.
"I have been building my managerial career, putting myself in challenging environments, to get me ready for this opportunity. It's a project that gives me a sense of purpose and I can't wait to get started."
Rooney, 37, started his managerial career in 2020 at Derby County. He went on to manage DC United in 2022. Rooney and the MLS club announced Saturday that they agreed to part ways.
The longtime Manchester United striker and England captain led DC United to a 10-14-10 record and ninth-place finish in 2023. DC United went 7-21-6 in 2022, finishing with the worst record in MLS. Rooney assumed control when the club stood at 5-12-3 on the season.
Rooney's Blues coaching staff will include former England teammate Ashley Cole, John O'Shea, Carl Robinson, Pete Shuttleworth and Maik Taylor.
NFL legend Tom Brady announced in August that he purchased a minority ownership stake in the Blues. He serves as chairman of a new advisory board and works directly with the club's board and members of the Birmingham City leadership team.
Brady also works with the club's sports science department as an adviser on health, nutrition, wellness and recovery programs. The seven-time Super Bowl champion, who retired last off-season from the NFL, shared the news of Rooney's hiring on his social media accounts.
Birmingham City finished 17th last season in the Championship. They were last relegated from the Premier League after the 2010-11 campaign. The Blues fired former manager John Eustace on Monday.
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