The Croatian, who was in charge of West Ham in the Premier League from 2015 to 2017, has signed a two-year deal with the Baggies.
West Brom missed out on promotion from the Championship after it lost on penalties to Aston Villa in the play-offs.
It sacked Darren Moore in March, with James Shan taking charge for the rest of the season.
"I'm delighted with this opportunity of course," Bilic said.
"We want to improve, we want to improve on the pitch and Albion have convinced me they want to return to the Premier League. Albion have a short-term project and a long project, and they do not clash.
"They wanted me to lead them, to help improve them. They made it clear they wanted me to be the one to lead them in this and I didn't think twice once they had spoken to me."
Bilic, 50, previously spent six years in charge of Croatia, who reached the quarter-finals at Euro 2008 under his leadership.