The former Newcastle United, Sunderland and Fulham midfielder had been part of Glenn Roeder's backroom staff at Norwich City.
He also worked under Roeder as a coach during his spell at the helm of the Magpies.
Clark has signed a three-and-a-half year contract with the League One club and is set to appoint experienced coach Derek Fazackerley as his number two.
"Some fans may look at the appointment of Lee and worry about young age and his perceived lack of experience and I suppose in a sense it is a gamble for the club as he has no track record as a manager," chairman-elect Dean Hoyle told the club's official website.
"But he is exactly what I was looking for and he will be surrounded by experience.
"He definitely embraces what we want to achieve here at Huddersfield Town."
Director of football development Gerry Murphy will remain in caretaker charge of the Terriers for Saturday's League One trip to Southend United.