Valverde and Juan Carlos Unzué emerged as the only two serious candidates for the post vacated by Luis Enrique, who announced in March that he would be leaving the club at the end of the season.
Valverde has always been reported to be the front-runner to succeed him, and the 53-year-old joins less than a week after Athletic confirmed that he would not renew his contract.
The announcement was made on Monday by Barcelona president Josep Bartomeu after the club's board meeting.
He has a philosophy of the game that is very Barcelona and he is a hard worker. We know him, we know what he can do. At the Nou Camp he played with Gary Lineker, Ronald Koeman and Michael Laudrup while a young Pep Guardiola was in the Barcelona youth team.
Enrique led Barcelona to the treble in his first season, the domestic double in 2016 and the Copa del Rey this year.
GETTY Ernesto Valverde will be in charge of Neymar Lionel Messi and Luis Suarez at Barcelona
Valverde will be presented officially on Thursday. Valverde also masterminded a memorable 5-1 victory over Barcelona in the Supercopa de Espana in 2015.
Born in Extremadura, Valverde spent two years at Barca as a player under Johan Cruyff between 1988 and 1990. "It's impossible not to accept Valverde as coach".
Valverde has also coached Espanyol, Olympiakos, Villarreal and Valencia. After their famous comeback against Paris St-Germain, they were knocked out of the Champions League in the quarterfinals by Juventus.
Taking a sabbatical, Valverde returned at Barca's city rivals Espanyol, leading the Catalans to the UEFA Cup Final in his first season.
His major successes came in Greece when he guided Olympiacos to three championships as well as two cup successes.
Barca believe Herrera can play in any of the midfield roles in a 4-3-3 formation and have Jose Mourinho to thank for moulding Herrera into a more defensively aware player.