Martinez’s appointment was announced on the official Twitter account of the Belgian Football Association on Wednesday night.
The 43-year-old Spaniard has been out of work since he was sacked by Everton in May after three years at Goodison Park.
Martinez succeeds Marc Wilmots who spent four years in charge of Belgium before losing his job after Euro 2016.
Wilmots steered the Red Devils to the top of the FIFA world rankings and they still currently hold second position.
Belgium reached the quarter-finals of the 2014 World Cup before losing to Argentina and they were among the favourites to become European champions this summer.
But they suffered a surprise 3-1 defeat to Wales in the last eight and Wilmots left his role within two weeks of that defeat.
Martinez began his managerial career in 2007 after coming to Britain from his native Spain to play for Wigan, Motherwell, Walsall, Swansea and Chester.
He took Swansea into the Championship before accepting the opportunity to take over Premier League Wigan in 2009.
Wigan won the FA Cup under Martinez in 2013 but were relegated a few days later and the Spaniard went to Everton.
Martinez had a successful first season on Merseyside with the team’s attractive style of play earning them a fifth-placed finish.
But Everton never hit the same heights again, with two Premier League finishes of 11th and a feeling that the club had massively under-achieved given the playing talent at Martinez’s disposal.