The Seasiders confirmed that the 42-year-old had been appointed to the post on a one-year rolling contract.
The position had been vacant since Jose Riga was sacked on Monday following a turbulent 15-game spell at the helm.
Chairman Karl Oyston had stressed the need for the club to quickly appoint a successor with Championship experience and Clark certainly fits the bill having managed for two seasons in the division at Blues, with whom he finished 12th and 21st.
However, the midlands outfit moved on from Clark last week following a poor run of results that had seen them win just twice this season, only one more victory than Riga managed in his short stint.
Clark told the club's official website: "I am absolutely delighted
The main objective is to try and keep the club in the Championship and build from there
It is a big challenge because of our position in the league but it's a challenge that can be overcome.
"It's one that if we achieve what we set out to achieve, which is to stay in the league, it will be a tremendous feat by the whole group
I'm very confident with the players I've got here, in what we can do going forward, that we can achieve those goals."
Clark takes over a club bottom of the Championship, seven points adrift of safety already, and with a mere four wins to their credit since last November.
He managed to save Birmingham from relegation in dramatic circumstances last season, when two goals in the final 12 minutes at Bolton prevented them from slipping into the third tier.
Riga's status as Blackpool's manager had looked highly precarious well before Oyston eventually pulled the plug on his time in charge this Monday.
Rumblings of discontent had been circulating for months with the two clashing over player recruitment following a summer of inexplicable inactivity at Bloomfield Road, and the point of no return appeared to be reached when then-Burton boss Gary Rowett was openly offered the job in September.
Rowett turned down the opportunity, though, and was this week confirmed as Birmingham's new manager following Clark's exit.
Source : PA
Source: PA