Hibernian: Terry Butcher takes over after Inverness CT agree deal
Terry Butcher is the new manager of Hibernian, with Inverness Caledonian Thistle accepting a compensation deal for the 54-year-old and Maurice Malpas.
Assistant Malpas had been offered the manager's role at the Caledonian Stadium, but declined it.
The duo have signed two-and-a-half-year contracts, running through to the summer of 2016.
Hibernian chairman Rod Petrie said: "We now look forward to welcoming the new management team to Easter Road."
And he added: "We are grateful for the professional and courteous way in which discussions between the clubs have been conducted."
Former England captain Butcher watched from the stand on Saturday as Inverness eased to a 2-0 Premiership victory over his new side at Easter Road.
Hibs, who are the lowest league scorers in Scotland, sit seventh in the table, 10 points behind the second-placed Highlanders.
Butcher replaces Pat Fenlon, who resigned on 1 November.
Butcher turned down a move to Barnsley in January before leading Caley Thistle to their highest league placing of fourth last season.
He took the team up from the First Division at the first time of asking in 2010 after failing to prevent them going down on becoming manager in January 2009.
Previously, the former Coventry City and Sunderland boss managed in Scotland with Motherwell and followed that with short spells in charge of Sydney and Brentford.
"It is a major disappointment to the club and its supporters that they have taken this decision," said Inverness CT chairman Kenny Cameron.
"I'd like to put on record our appreciation of the excellent job they have done at Inverness since Caley Thistle provided them with the opportunity to join the club.
"In the past couple of days we have been inundated with indications of interest from potential candidates or their representatives and we are positive this interest will now escalate.
"The supporters can be assured that the board will work its way through the options for a manager, arrive at a short list and proceed to interview.
"There will be no knee-jerk reaction and we are confident of appointing a manager of the calibre we require."
Hibs are on a run of four consecutive defeats, with coach Jimmy Nicholl overseeing two of those games since Fenlon's departure.
Nicholl played with Butcher at Rangers and said at the weekend that his former team-mate was "taking on a big job at a big club".
"It's going to need someone to come in to give them a wee lift," he added.