Chariman Steve Parish told the club’s website: “We are delighted to be able to make an appointment so quickly and fortunate that someone of Sam’s calibre and experience was available.”
He will take charge of the team with immediate effect in time for the Boxing Day match against Watford.
The 62-year-old former England Manger met with chairman Steve Parish earlier today to discuss terms, and the former Bolton Wanderers, Newcastle United and Sunderland boss has now agreed a deal to keep him at Selhurst Park until 2019.
The job is Allardyce’s first since being sacked by England just 67 days into his reign following an undercover media sting.
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