The 44-year-old, a prominent member of France's 1998 World Cup-winning squad, replaces Raymond Domenech, whose contract ended with France's group stage exit from the 2010 finals.
GEAR:Get a France shirt
Blanc's task will be to qualify the team for the 2012 European Championship finals in Poland and Ukraine and help them make a fresh start after the World Cup debacle.
The former defender, who coached Girondins Bordeaux to the 2009 Ligue 1 title, was appointed during a council meeting of the French Football Federation (FFF) in Paris.
FFF president Jean-Pierre Escalettes formally handed in his resignation at the meeting, having said on Monday he would quit after the federation was blamed for the way it handled a player revolt in South Africa.
"I have decided to resign because it is my duty," Escalettes told a news conference on Friday. "I accept my share of responsibility."
Domenech's six-year tenure ended in shame when France left the World Cup with a point and a goal after a scandal involving players' boycotting a training session in support of striker Nicolas Anelka, who was sent home for insulting the coach.
"Raymond Domenech has humbly admitted that he had made mistakes and so have I," said Escalettes, who had faced criticism for leaving the controversial Domenech in charge after the side's Euro 2008 flop when they crashed out in the first round following two defeats and a draw.
FELT HUMILIATED
The 75-year-old Escalettes and Domenech's lack of authority were exposed when they failed to convince the players they should train at their base in Knysna, Western Cape.
"It was my responsibility to make the players get out of the coach and train and I failed," Escalettes said.
"I felt humiliated. I am ashamed and I present my apologies to all those who loved and believed in that France team and to the whole world."
A caretaker FFF president will be named at a council meeting on July 23 and will stay in charge until an election is organised later this year.
France have plenty of rebuilding to do after the team looked lost on the pitch in South Africa and tarnished their reputation with bickering and scandals off it.
"All my life I tried to give another image than the one I am leaving and I feel sad," Escalettes said. "My successor will have to draw the conclusions from what happened to make sure it never happens again."
MORE RESPECTED
A prolific player both at international and club levels, Blanc has already enjoyed success in his coaching career with Bordeaux.
Nicknamed "The President" for his calm authority in his playing days, he will initially be more respected than the controversial Domenech, if only for his far more impressive resume.
"I believe in Laur
