The former Porto boss has been without a coaching job since leaving Chinese Super League side Shanghai SIPG in November 2017.
Villas-Boas has been appointed following Rudi Garcia’s departure, with the former Lille and Roma coach having left on May 22.
Marseille CEO Jacques-Henri Eyraud said: “Andre Villas-Boas is a young and already very experienced coach. He has a perfect knowledge of the requirements of the highest level.
“We expect him to breathe new life into the group that he will be in charge of. We are convinced that his sharp vision of football and his sense of innovation will be major assets to enter a new cycle, which will allow our club to resume its progress.”
Under Garcia, Marseille had a frustrating campaign in Ligue 1, finishing in fifth place and missing out on European football.