However, in a sentimental appointment, Newcastle owner Mike Ashley handed the job to Keegan, a decade after he left the club.
A former Magpies player, Keegan led the club to relative success in the nineties, culminating in a second place finish in the 1996/97 season.
Keegan had been out of a job since leaving Manchester City last season.
He replaces Sam Allardyce who was sacked last week.