The length of Clark's contract was not disclosed.
Brum chief Peter Pannu said: "I was impressed by Lee's tenacity, zest and his ambition. He is enthused by the challenge ahead and is determined to make Birmingham City a real force in the npower Championship this season. Judging from his record at Huddersfield, I know he has the capability to do exactly that.
"The shortlist of four, out of the 22 applicants, that we put together meant that the appointment of Lee Clark was carefully studied and was a thorough and informed decision by the board.
"I now expect the fans to give him their full support."