The 40-year-old, who supported Jose Mourinho at the Spanish club, replaces Tony Mowbray, who departed on October 21 after a disastrous run of form in 2013.
The Championship side, who currently sit 16th in the table, won just five of their 33 games in the calendar year before Mowbray was dismissed.
Under caretaker boss Mark Venus, Boro recorded a four-goal victory at the Riverside Stadium against Doncaster before defeat to Blackburn Rovers and Saturday's last-gasp draw with Watford.
The Spaniard, who was also linked to Premier League side Crystal Palace, spent time at the head of the Spain Under-16 side, but has never managed a club in his own right.
His first match in charge of Middlesbrough will see them visit Leeds United, who have won all of their previous three fixtures at Elland Road and he is excited for the new venture.
"It's a very important day for me - it's my new job," he said.
"I think it’s the best thing in the world because I find a club like a family, with a big stadium, big supporters.
"It's my time. I have worked with Jose Mourinho and he was a great influence, I learned a lot from him.
"He's a person who has helped me for months I always speak with him and he told me to come here."
