The 58-year-old becomes only the second man to ever manage both Sheffield teams, after Danny Wilson. It is not the first time Bruce has taken charge of a former club's direct rivals, having also been in the hot seat at both Birmingham and Aston Villa.
Here, Press Association Sport takes a look at Bruce's spells as boss of the Blades, Blues and Villa.
In 55 games as Blades boss, Bruce won 22, drew 15 and lost 18. His first managerial role saw the former Manchester United defender guide the Sheffield club to an eighth-place finish in the old First Division, nine points shy of the play-off places. Bruce's time in charge at Bramall Lane is perhaps best remembered for when he controversially appeared to attempt to take his team off the pitch during an FA Cup fifth round tie away at Arsenal. Bruce felt that the Gunners had broken an unwritten rule and acted in an unsporting manner by scoring the winning goal from a throw-in instead of returning the ball to United, who had intentionally kicked it out of play to allow an injured player to receive treatment.
Bruce's longest spell in charge is at St Andrew's, where he managed from 2001 to 2007. He won his first promotion as a manager during his first year at Birmingham, defeating Norwich, who he used to play for, on penalties in the Championship play-off final to end the club's 16-year absence from the top flight. Bruce guided Blues to consecutive finishes of 13th, 10th and 12th in the Premier League before he oversaw Birmingham's relegation in 2006. However, he got the club back up at the first attempt and promoted for the second time, this time finishing in the second automatic promotion spot just two behind champions Sunderland. In November 2007, Bruce left to become Wigan manager for the second time after Latics agreed a compensation package for his services.
After two further Championship promotions at Hull, Bruce returned to the city of Birmingham to replace Roberto Di Matteo at Villa Park. He steadied the ship upon his arrival and Villa finished 13th in the Championship at the end of the 2016/17 campaign. His first, and only, full season in charge saw Bruce steer Villa to the Championship play-off final where they were beaten 1-0 by Fulham at Wembley. This season did not begin well and after Villa surrendered a two-goal lead at home to Preston on October 2 to draw 3-3, Bruce was sacked the next day after only one win in nine Championship matches.