The 51-year-old, who was last in management with Middlesbrough, succeeds Steven Pressley, who left the club last month following an 11-game winless run in the league.
Chief executive Steve Waggott said: "We are absolutely delighted to welcome Tony Mowbray to Coventry City as our new manager.
"We've secured the services of a highly rated, experienced candidate for the job and Tony is a manager who has enjoyed plenty of success at a higher level."
Mowbray will be in the stands for Wednesday's trip to Barnsley.
Coventry recorded a surprise 2-1 win over MK Dons on Saturday to move out of the relegation zone by one point.
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