Hughes emerged as an early candidate to take the Southampton reins and, on Wednesday night, the club announced the arrival of their former striker in the dugout.
"It's a challenge I'm excited by," the former Stoke City boss told the official Southampton site. "It's a great opportunity to come back to a club I know well, and a club I've got real affinity with, and I couldn't turn that down.
"I bring experience of the Premier League. I understand what it takes in this league to win games. But first and foremost I think it's about coming in and maybe being that different voice, that different message from myself and the staff, that will enable the players to recognise and focus on what needs to be done in this key period of the season.
"The objective clearly is to remain in the league and make sure we're a Premier League club next year. That's where this club needs to be, that's where it should be, and that's our intention to make sure it remains there."
The Welshman, who made 60 appearances for the south coast outfit as a player, will be joined at St Mary's by Mark Bowen and Eddie Niedzwiecki as assistant manager and assistant first-team coach respectively.