Benitez, who was sacked as manager of Real Madrid earlier this season, has been handed the job of attempting to steer Newcastle to Barclays Premier League survival, with the club second-from-bottom heading into the weekend.
He said in a statement released by the club: "I have the pleasure to confirm I have committed to a legendary English club, with the massive challenge of remaining part of the Premier League.
"It will be a challenge not just for me and my staff but for the players, the club and the fans."
Benitez's appointment followed swiftly on from the dismissal of McClaren, who was relieved of his duties on Friday morning.
Benitez arrived at St James' Park shortly after 2pm to hold face-to-face talks with Magpies managing director Lee Charnley after days of discussions between the Benitez camp and intermediaries.
The club also confirmed the appointments of Fabio Pecchia, Francisco de Miguel Moreno and Antonio Gomez Perez, who will join Ian Cathro and Simon Smith to form Benitez's coaching team.
It is understood the players, who were on a day off, had been summoned to the training ground for a meeting, where they may now meet their new boss for the first time.
Benitez added: "All of us must push together in the same direction and with the same target in mind. This is the reason why I'm going to ask for your total support to successfully complete this task.
"Personally, it means my return to the Premier League, closer to my home and my family. I can't be happier.
"C'mon Toon Army! The club and I need your total involvement!"
Charnley said: "I am very pleased to welcome Rafa Benitez to the club. In Rafa we have, without doubt, secured the services of one of Europe's top managers.
"He has managed some of the most successful teams at the very highest level of the game and we are proud to now have him as our manager.
"Our sole focus now is to give our full support to Rafa, his coaching team and the players in order to secure our status in the Premier League."
The club also confirmed the departures of Paul Simpson, Alessandro Schoenmaker and Steve Black.
McClaren had finally been put out of his misery when a club statement at 1130 on Friday morning confirmed his Newcastle tenure was over.
"After the defeat to Bournemouth on Saturday, the club has spent some time considering its position and has today concluded that Steve McClaren's employment with the club will end with immediate effect," the statement read.
"We acknowledge that reaching this decision has taken a number of days and that this has caused uncertainty for everyone involved, in particular for Steve and the players, for which we apologise. However we felt that this time was necessary to ensure the right decisions were reached with the best interests of the club at heart."
McClaren departed with the club lying in 19th place in the Premier League table, and with only 10 games remaining in which to spare themselves a second relegation in seven years.
He has spent the last six days waiting to learn his fate in the full knowledge that potential replacements were being sounded out.
McClaren held training with the players on Tuesday, Wednesday and Thursday before his departure, with the club next in action against league leaders Leicester on Monday night.
The new man's first home game will be the clash with neighbours Sunderland on March 20 - perhaps the biggest Tyne-Wear derby in many years, with both clubs battling the drop.