"We are delighted to have secured a head coach of Neil's calibre and profile," Rod Petrie, chairman of the four-times Scottish champions told the website.
"We look forward to him bringing his drive and mentality to our campaign to win the Championship this season and secure promotion back to the top flight of Scottish football."
Lennon, who won three Scottish titles with Celtic, left cash-strapped English side Bolton Wanderers in March prior to their relegation to the third-tier of English football.
Lennon will be assisted by Garry Parker, who was part of his management team in Celtic and Bolton.
Hibs will play in the qualifying rounds of the Europa League next season by virtue of their Cup victory.
(Reporting by Nivedita Shankar in Bengaluru; Editing by John O'Brien)
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