The 46-year-old, who Goal revealed to be in the running last week, inherits the reins from Claudio Ranieri, who had seen out the 2018-19 campaign at Stadio Olimpico in an interim post.
He is now taking on a new challenge, with Roma president Jim Pallotta saying of his appointment on the club’s official website: "We are pleased to welcome Paulo Fonseca to the club.
"Paulo is a young and ambitious coach with international experience, a winning mentality and is known for his brave and offensive idea of football that will excite our fans.
"From the first time I spoke to him he immediately expressed his desire to come to Rome and his enthusiasm in accepting a new challenge, starting to work with our players to set up a team that the fans can feel proud of."
Fonseca added on his arrival in the Italian capital: "I am very happy to have been appointed as the new coach of AS Roma and I would like to thank the entire leadership of the club for the opportunity given to me.
"I am enthusiastic and motivated by the challenge that awaits us and I look forward to moving to Rome, meeting our fans and starting work.
"I believe that together we will be able to create something special."
Fonseca was a defender in his playing days, taking in over 100 appearances in the Portuguese top flight.
He hung up his boots in 2005 and made an immediate transition into coaching.
Over the course of his management career to date, he has tasted domestic cup success in Portugal and Ukraine while also guiding Shakhtar to three successive league titles.