The 51-year-old replaced Portuguese Paulo Sousa, whose contract was not renewed after an exasperatingly inconsistent season which saw the Violets finish eighth in Serie A.
Pioli has done the rounds in Italian football and Fiorentina will be the 12th professional team he has coached.
A central defender in his playing days, Pioli's first job as head coach was with Serie B side Salternitana in 2003.
He moved to Modena, another second tier side, in 2004 and got his first chance in the top flight with Parma in 2006.
He was sacked after six months with the team one place off the bottom, and went back to Serie B where he coached Grosseto, Piacenza and Sassuolo.
Chievo brought him back to Serie A in 2010 and he moved to Palermo the following year but lasted just 90 days at the notoriously volatile club.
Next stop was Bologna where Pioli managed to keep them in Serie A during two difficult seasons, finally moving to Lazio in 2014 where he lasted just under two years.
He was given his first chance at one of Italy's big clubs in November last year when Inter Milan hired him but, after a promising start, was dismissed last month following a seven-match winless run.
He made 156 appearances for Fiorentina as a player between 1989 and 1995.
(Writing by Brian Homewood; editing by Mark Heinrich)
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