Gracia takes over from Jose Luis Mendilibar, who was sacked on Tuesday with Osasuna rooted to the bottom of the Primera Division standings after losing their opening three games this season.
"Osasuna and Javier Gracia at 1700 (CET) this (Wednesday) afternoon signed a contract for the coach to take charge of the first team, along with (assistant) coach Juan Solla," read a statement on osasuna.es.
"The contract binds Javier Gracia and Juan Solla with Osasuna over the next two years.
"Javier Gracia will take training on Thursday from 1000 (CET) and will then be presented at the Instalaciones de Tajonar, accompanied by president Miguel Archanco."
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