The 44-year-old Clement has signed a two-and-a-half year deal in South Wales and will succeed Bob Bradley, who parted company with the club on 27 December after just 85 days and a dismal 11-match stint that ended with a heavy Boxing Day defeat to West Ham United.
Wales' Chris Coleman, Manchester United icon Ryan Giggs and former Birmingham City boss Gary Rowett had all been heavily linked with the vacant post before Clement emerged as the leading candidate. The highly-regarded coach is set to watch from the stands on Tuesday night (3 January) as struggling Swansea face a proverbial relegation six-pointer against Crystal Palace at Selhurst Park before taking charge for the first time this weekend in an FA Cup third-round tie against Hull City at the KCOM Stadium.
Carlo Ancelotti's right-hand man at Chelsea, Paris Saint-Germain and Real Madrid, Clement reunited with the experienced Italian at Bayern Munich in June. He also rejected the opportunity to join England's coaching staff following the short-lived appointment of Sam Allardyce.
"Paul has been a professional, loyal and capable coach for us," said Bayern chairman Karl-Heinz Rummenigge. "We did not want to stand in his way of becoming a manager in the Premier League. We wish him all the best for the future."
Swansea will be Clement's second job in management following an ill-fated spell with Championship outfit Derby County. He was initially named as Steve McClaren's replacement on a three-year contract in June 2015, only to be dismissed eight months later following a seven-game winless run.
The Rams were still fifth and only five points adrift of top spot at the time of his sacking, with chairman Mel Morris somewhat bizarrely insisting that promotion was "not the primary target". Instead, Morris deemed that Clement had not made enough progress in other key areas including style of football, squad depth and improving performance.
Clement, succeeded at Bayern by Hermann Gerland, inherits a Swansea team that begin 2017 bottom of the Premier League and four points adrift of safety following a typically woeful 3-0 home defeat by Bournemouth that came under the temporary guidance of Alan Curtis. The Swans, who have sacked three managers in a 12-month period, have won just three and lost 13 of their 19 top-flight matches so far this term. Having conceded a pitiful 44 goals in that span, they currently share the league's worst defensive record with Hull.
Clement's arrival is likely to be seen as another risky gamble given his lack of previous Premier League managerial experience and The Mirror report that American owners Jason Levien and Steve Kaplan, who spent £110m on a controlling stake in the club during the summer, are willing to back the new man in his bid to stave off relegation to the second-tier with a £30m January transfer kitty.
Former Reading, Leeds United and Millwall number two Gibbs, who had been working at Spurs as assistant head of player development, arrives at the Liberty Stadium as an assistant coach. Halabi has also leaves White Hart Lane in order to succeed Pierre Barrieu as head of physical performance.
Swansea chairman Huw Jenkins on the appointment of Paul Clement
"We are delighted with the appointment of Paul Clement as our new head coach. Paul has not only worked with some of Europe's biggest football clubs, but also the very best players in the world. Swansea City's strength over many years had been the quality of the football coached on the training field. That has always been at the forefront of our success.
"There is no doubt in my mind that Paul can not only help us regain that footballing belief, but also restore some much needed pride back into the football club. Everyone connected to the club is fully behind the appointment and we see this a typical Swansea City choice. It looks a good fit to get us back on track and provide one of the best young coaches in Europe with the chance to develop his own career and become a leading coach in his own right.
"I'm sure every Swans supporter, like me, would want to wish Paul the best of luck at the club and that he enjoys his time with us at Swansea.''