A statement on the Birmingham website said: "The club is delighted to announce that Harry Redknapp is Blues new manager".
Zola, sacked in his previous managerial job after just one season with Qatari side Al-Arabi, has also had spells in charge of West Ham, Serie A side Cagliari and Watford.
Redknapp has only three games to save Birmingham from the dreaded drop out of the Championship, with the defeat to Burton leaving the free falling Blues three points above the relegation zone.
The club confirms the appointment of Redknapp who is the oldest manager in the EFL at the age of 70. I haven't got a magic wand that's for sure, it's up to them. It is not going to be easy but it is a challenge and I look forward to it.
The moment Redknapp's name appeared across Sky Sports News' breaking news banner, Birmingham fans rushed to Twitter to make the exact same joke about his expected first signing.
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Their final three matches are trips to Aston Villa and Bristol City plus a home match against play-off hopefuls Huddersfield Town. I'll live up there until the end of the season, and if I keep them up I'll sit down and talk about next season.
He said: "I went over the park two weeks ago and coached some under 10s".
"It's a big club and it's a challenge, a big challenge. I got home and my wife said: 'Are you mad?"'
He said: "When a team only wins two out of 24, it tells you it's not going to be easy. If I feel like I can not help these players why stay - it's better that I leave and let somebody else do that".
Should Blackburn and Nottingham Forest both win on Saturday, Birmingham would slip into the bottom three before Redknapp's first match in charge, which is a trip to local rivals Villa on Sunday.