The 39-year-old told reporters at a press conference that he has the ambition to make a success of the "big challenge" awaiting him.
"The opportunity to come to an historic and big club like Birmingham is always an appeal and of course there's the challenge of those type of clubs," Monk said. "I have always been one with that ambition to take big challenges on.
"I was the same way in my playing career as in my managerial career and that is what I like to do.It moved very quickly through the discussions but understanding what Birmingham is and what a huge club it is, the fanbase it has, players that are here - all those ingredients suited the challenge I was looking for and that is the reason why I am here today.
"Yes, we're in a difficult moment but there's also lots of potential going forward at this club. I'm the type of person to take challenges on and this is one I'm really looking forward to. I'd like to thank Mr Zhao and Dong for giving me the opportunity."
Birmingham sit 22nd in the Championship table, two points adrift of safety.