The former Romania international stepped down from his position at Kuban Krasnodar earlier this week, and will now continue his career at the Russian capital club
The former Chelsea star has inked a three-year deal with his new club.
The Russian outfit were in the market for a new coach following the departure of Sergei Silkin earlier this month, and they have now found their man in the form of Petrescu.
The 44-year-old resigned from his post at Kuban Krasnodar on Tuesday, and has not wasted any time to find himself a new challenge.
Petrescu started his coaching career with Rapid Bucharest and was also in charge of Wisla Krakow and Unirea Urziceni before taking the reins at Kuban in December 2009.
Dinamo currently sit last in the Russian league table with four losses from as many games.