Lampard replaces Rafa Benitez, who was fired two weeks ago, and is tasked with reversing Everton's slide toward the relegation zone. The club, which has been in English soccer's top division since 1954, is 16th in the 20-team league and just four points above the bottom three.
The 43-year-old Lampard was fired as Chelsea manager one year ago after 18 months in charge of the club for which he starred as a player.
Chelsea had brought back its midfield great and record scorer as manager in 2019, even though Lampard had only a single season's experience in management in the second division with Derby.
He achieved Champions League qualification in his first season at Stamford Bridge by securing a fourth-place finish in the Premier League, but was fired midway through last season with Chelsea in ninth place and its defensive record particularly concerning under Lampard.
More damning for Lampard was the fact that his replacement _ Thomas Tuchel _ almost immediately got the best out of Chelsea's expensively-assembled squad and led the team to the Champions League title in May.
Lampard scored 211 goals for Chelsea from central midfield from 2001-14, during which he won every major honor at the club including three Premier League titles and the Champions League.
The Derby manager Wayne Rooney, Lampard's former England teammate, said Friday that he declined an interview for the vacancy at Everton.
Everton is a nine-time English champion _ but not since 1987 _ and is without a major trophy since 1995, living in the shadow of neighbor Liverpool during that time. The team is an ever-present in the Premier League since the inaugural 1992-93 season, but looks set to be in a relegation fight this year after winning just one of its last 14 games.
Lampard is the sixth full-time manager hired since Farhad Moshiri became majority owner in 2016. The Iranian businessman has spent nearly $700 million on transfers in that time and this month injected another 100 million pounds ($135 million) into the club, saying it demonstrates his commitment amid turbulent times at Goodison Park.
Lampard's first game in charge will be at home to Brentford in the fourth round of the FA Cup on Saturday.
(For more sports news and updates, follow Ahram Online Sports on Twitter at @AO_Sports and on Facebook at AhramOnlineSports.)