The club announced the appointment today, saying they were "delighted to welcome" the 49-year-old.
It comes after Neil Warnock's departure from the club, following their match against Stoke City.
In a statement, the Terriers said that Moore was the standout first choice following an extensive recruitment process.
Moore led the Owls to promotion from League One last season but left by mutual consent in the summer.
Huddersfield Town Chief Executive Jake Edwards said that "a lot of time, effort and analysis" went into choosing the club's next manager.
He added: "Darren has a track record of success as a player at this level, but more importantly as a manager.
"He has gone into clubs and revolutionised cultures into winning ones on the back of real challenges like relegation.
"He turned things around at West Bromwich Albion and Doncaster Rovers to make them into promotion contenders and steered Sheffield Wednesday back into the Sky Bet Championship last season."
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