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.
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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.
"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.
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."
"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."
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
