The news comes days after the Cobblers decided to part company with Justin Edinburgh after their disastrous start to the season, which has seen them lose all four games by an aggregate 10-2 scoreline.
Hasselbaink has previous management experience in the third tier of English football, having won promotion to League One with Burton Albion before leaving them in rude health at the top of the table when he made a switch to Queens Park Rangers.
Northampton chairman Kelvin Thomas said: "Once we made the decision regarding the position last week we received a high number of applications. We had two targets that we wanted to speak to initially and following discussions with myself and then other members of the board, Jimmy became our top choice so we are pleased to be able to secure his service.
"He is an inspirational leader, someone who has had success at this level in the recent past and we think he is a very good fit here.
"We have sought a lot of advice and have spoken to and taken on board feedback from people who have worked with Jimmy before and those who have played against his teams. He is a manager who injects confidence and belief into his players, and someone who we think can begin to unlock the potential of what we believe is a good squad we have here."
Hasselbaink will take charge of his new side for the first time this Saturday when they welcome Doncaster Rovers to Sixfields.