The Serbian, who has been promoted twice from the Championship with Fulham and Watford, has signed a three-year deal. He becomes the club's first overseas manager.
On his appointment, he said: “I’m honoured to become the manager of this historic football club and I’m grateful to Prince Abdullah bin Mosa’ad bin Abdulaziz Al Saud, Yusuf Giansiracusa and Stephen Bettis for trusting in me to start this new chapter for the Blades. We all share the same long-term vision, passion and ambition for Sheffield United.
“I’m excited to work in English football again and I’m looking forward to getting started with the players and staff, as well as meeting our passionate, loyal supporters as we prepare for the challenge in the Championship.
“I want to assure our amazing fans that we’re fully committed to helping the team achieve its goals and make you feel proud. With your support, we can make Bramall Lane a fortress and I have no doubt that your voice will make a big difference to the team after so long without you last season.
“Let’s work together to get Sheffield United back to where the club belongs.”
Jokanovic is currently seeing out his commitments with Qatari League outfit Al-Gharafa, which end next month.
After leaving Fulham in 2018, Jokanovic was subsequently appointed manager of the Gulf outfit in the following year, helping them to fourth in the Qatari League and a place in the Asian Football Confederation Champions League.
Blades owner, Prince Abdullah observed: “Over the past two months, the club has undertaken a rigorous recruitment process in our search for the right person to take Sheffield United forward.
"We’ve been keenly conscious of the importance of this decision and therefore have considered many strong candidates and have undertaken thorough due diligence. After an exhaustive evaluation, it was evident that Slaviša was the man we needed at the helm.
“Once we held discussions with Slaviša, it was also abundantly clear that his ambitions were aligned with those of the club. It goes without saying, we are thrilled to have someone in charge with a CV which boasts a proven track record of success in England and abroad. We believe this appointment further underlines our commitment to ensuring success for Sheffield United.”
Several names had been linked with the Bramall Lane job including Oostende boss Alexander Blessin, who was on the club's short-list alongside Jokanovic and interim manager Paul Heckingbottom.
Blessin was a serious contender for the job after an impressive first season in the Belgium Jupiler Pro League. But post Brexit regulations meant that the 47-year-old would have needed to work for two consecutive years in a top league or three of the last five to fulfil cretia to head to England.
But Jokanovic, who previously worked with United midfielder Oli Norwood at Fulham, has been identified as the chosen candidate and will return to England football with the Blades.
Jokanovic's Watford finished as runner-ups to Bournemouth and accompanied them automatically to the Premier League in 2014-15.
He later oversaw Fulham's promotion in 2017-18, when they beat Aston Villa in the play-off final.