The Italian's turbulent spell in charge at Manchester City ended when he was sacked in May just a year after leading them to the Premier League title.
The 48-year-old will succeed Fatih Terim, who was fired last week after he failed to agree terms on a new two-year contract.
Terim had three spells as manager and led Galatasaray to six Turkish League titles, but they have won only one of their first six league matches this season.
Mancini met with the club's directors over the weekend and the board confirmed he has signed a three-year deal worth just under £10.5m, excluding bonuses.
His first match in charge will be Wednesday's daunting Champions League clash at Juventus as they bid to bounce back from their 6-1 thrashing by Real Madrid in their Group B opener.
Mancini said in quotes reported on the official Galatasaray Twitter feed: "I am very happy to come to a club as big as Galatasaray.
"The Galatasaray-Juventus match will be a happy coincidence for me."
The encounter at Juve could pitch Mancini against his former striker Carlos Tevez, who infamously fell out at City when Mancini claimed the striker refused to play for him in a Champions League match at Bayern Munich.
But Tevez, who was frozen out of the club for five months, is a doubt for the match due to an ankle injury.
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