The Liga MX giants fired Miguel Herrera on Dec. 21 after the club crashed out of the Liga MX playoffs against bitter rival Chivas and then fell to LAFC in the semifinal of the CONCACAF Champions League on Dec. 18.
Solari, 44, managed Real Madrid for a short spell between November 2018 and March 2019, before being sacked and replaced by Zinedine Zidane.
"We recognised that Solari has an ideal profile for our project," Club America President Santiago Banos said.
"Throughout his career as a footballer and manager he has been able to successfully meet the demands and objectives of teams like Club America, whose only goal is the title."
At club level, Solari played for River Plate, Real Madrid and Inter Milan, among others. He also made 11 appearances for the Argentina national team.
Solari will oversee his first match for Club America against Atletico San Luis when the Liga MX Clausura begins on Jan. 9.
Information from Reuters was used in this story.