Berizzo returns to the club where he spent four years as a player from 2001 to 2005, taking over from Luis Enrique, who announced his departure on Friday and is widely expected to replace Gerardo Martino at Barcelona.
The 44-year-old Berizzo moves to Balaidos after an extremely successful spell in charge of Chilean outfit O'Higgins.
O'Higgins won the Apertura title in December 2013 under the stewardship of Berizzo, marking the first time in the Rancagua club's history that they had achieved such a feat.
And Berizzo will hope to enjoy more good fortune with a Celta side that was guided to a top-half finish by Luis Enrique.
Celta ended the season in ninth place in La Liga, their highest finish since 2005-06, when the Galician club secured sixth spot.
