Despite previously working as the manager of League One club Swindon Town and playing in both England and Scotland during a long playing career, news of his appointment rekindled interest in the remarks he made to Italian news agency ANSA in 2005 when he said: "I am a fascist, not a racist."
The former Labour Government foreign secretary David Miliband immediately resigned as Sunderland's vice-chairman and non-executive director after Di Canio was named Martin O'Neill's successor on Sunday night.
Miliband cited the Italian's "past political statements" as his reason for leaving the board.
Di Canio, 44, was named as manager of the struggling Premier League club after the surprise dismissal of O'Neill on Saturday with Sunderland hovering just above the relegation zone without a win in their last eight matches.
On Monday Di Canio issued a statement on Sunderland's website refuting the allegations made against him.
"Something can happen many years ago but what counts is the facts," he said.
"My life speaks for me. Of course it hurts me because people try to take your dignity and that is not fair.
"I believe in my pillars and I have values. What offends me more than anything is not because they touch me; they touch what my parents gave to me; the values they gave to me. This is not acceptable.
"What I can say is that if someone is hurt, I am sorry. But this didn't come from me, it came from a big story that people put out in a different way to what it was."
STUPID AND RIDICULOUS
Di Canio continued: "I don't have a problem with anyone. I haven't had a problem in the past and I don't know why I have to keep repeating my story, to be defending myself on something that doesn't belong to me every time I change clubs.
"Talk about racism? That is absolutely stupid, stupid and ridiculous. The people who know me can change that idea quickly. When I was in England my best friends were Trevor Sinclair and Chris Powell, the Charlton manager - they can tell you everything about my character."
Sunderland's CEO Margaret Byrne said the club was disappointed by some of the reaction to Di Canio's appointment and that some people were trying to turn it into a "political circus".
"Sunderland AFC is a traditional football club, with a rich and proud history. It has a strong ethos and ethics and that has not changed in any shape or form.
"Naturally it's been very disappointing to read some of the reaction to Paolo's appointment in the last 24 hours.
"Anyone who has met Paolo and spoken with him personally, as we did in depth before making this appointment, will know that he is an honest man, a man of principle and a driven, determined and passionate individual.
"To accuse him now, as some have done, of being a racist or having fascist sympathies, is insulting not only to him but to the integrity of this football club.
"Paolo has spoken emotively and at length in order to clarify some of the misconceptions that surround him and histor
