Just over three weeks since the Premier League season ended in relegation, the Clarets have ended their search for Sean Dyche’s successor.
Kompany, 36, joins after departing the Belgian First Division’s R.S.C Anderlecht where he spent three years.
He joined Anderlecht in 2019 as player-manager before taking on the role full-time in August 2020.
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During his first full season as manager, Kompany led the club to a fourth-place finish overseeing a youthful squad with the youngest average age in the league.
Last season Kompany led Anderlecht to third place, European qualification and the Belgian Cup Final.
As a player, he spent seven years as Belgian national captain, where he led his country to the 2018 World Cup semi-finals, and captained Manchester City to four Premier League titles, two FA Cups and four EFL Cups.
“Burnley Football Club is a truly historic English side and it is an honour to be appointed first-team manager,” said Kompany. “I’m excited by the challenge ahead.
“I’m looking forward to getting to work with the players and creating a positive, winning team for our fans when we return to Turf Moor.
“I’ve been impressed by the Board’s vision for the club which aligns with my own and I look forward to playing my part as we enter an important season.”
Burnley FC Chairman, Alan Pace said: “We are absolutely delighted to welcome Vincent to Burnley Football Club.
“Vincent is a proven leader and I’ve been very impressed with his ideas for Burnley Football Club, his appetite to succeed and his focus on leading the Club back to the Premier League.
“Vincent has shown impressive credentials in leading one of Belgium’s biggest teams back to European football and a Cup Final last season and we’ve been excited by his philosophy, approach and ambition for the club.”