Baggio and FIGC president Giancarlo Abete had a two-hour meeting on Monday and the 43-year-old had announced then that he had accepted the role offered to him. On Wednesday an official announcement was made.
Milan legend Gianni Rivera has been appointed the president of the youth academy while former Italy coach Arrigo Sacchi is the new coordinator of the junior national teams.
Italy are undergoing a massive change in the wake of their disappointing performance in the 2010 World Cup finals in South Africa where they failed to get past the group stage.
The Azzurri will take on Cote d'Ivoire in a friendly international in London on Tuesday, August 10.