The 40-year-old will replace Gus Poyet at the helm of the Championship side after the former Chelsea man had his contract terminated on Sunday following an internal investigation
Poyet was sacked by the club on Sunday following an internal investigation after the Uruguayan was suspended in the aftermath of the club's play-off semi-final defeat.
Garcia will now take charge of the club and says is he looking forward to working with the Championship side.
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Brighton chairman Tony Bloom also welcomed the new head coach to the club adding: "We are delighted to have Oscar here to help us prepare for the new season and plan what promises to be another exciting campaign for the club."
Garcia featured for Barcelona, Valencia and Espanyol during his playing career and spent a year in charge of Maccabi Tel Aviv, winning the title before resigning from his post.