The 40-year-old has left Colchester to take over from Bryan Gunn in the Carrow Road hotseat.
Ironically, Gunn was only relieved of his duties four days ago following a humiliating 7-1 defeat at the hands of Lambert's Colchester.
The 40-year-old former Celtic midfielder had guided Colchester to two wins from their opening two games of the new League One season, and has impressed the City hierarchy enough to have been offered the job.
"It's a big club and there is no way we should be where we are," he told Norwich's official website.
"We want to get promoted but we certainly understand there are going to be some challenges if that is going to become a reality."