Blues chairman Gary Whetton congratulated Kirwan on the new position, highlighting that the expectations in front of him were significant.
"It's been a tough season for the Blues. Our supporters expect the team to play winning rugby, as we all do. The challenge is clearly laid down for John and we look forward to seeing positive results. While there's no denying John has a stellar playing record in New Zealand, our interest was in finding the right coach for the Blues - someone who could coach this team to success and we've selected John to do that.''
Kirwan's coaching resume includes head coach of the UK Barbarians (2012), head coach of Japan (2007-2011), and head coach of Italy (2002-2005).
As a player, he represented the All Blacks from 1984-1994 (named All Black of the Year following the Rugby World Cup win in 1987). Kirwan represented Auckland from 1983-1994.
NZRU General Manager of Professional Rugby Neil Sorensen said Kirwan's appointment followed an intense interview process and he represented an opportunity for change for the Franchise. Kirwan was appointed on the unanimous recommendation of a joint NZRU and Blues panel, which is the standard process for all Investec Super Rugby Coach appointments.
"We welcome John back to New Zealand and to Auckland. We know that his appointment will be a popular one. John presented himself very strongly during the recruitment process and we were impressed with the level of preparation and his understanding of what is required to produce a winning Blues team.''
Both Whetton and Sorensen paid tribute to outgoing head coach Pat Lam.
"We know this is a difficult time for Pat who has been a long and loyal servant to Auckland Rugby and the Blues and we thank him for all he has given to both,'' Whetton said.
Sorensen said: "We know that Pat will be very disappointed with this outcome as he had worked tirelessly for the Blues. We will continue to talk to Pat about his future and we wish him well.''
Pat Lam made his Blues coaching debut in 2009 having coached Auckland from 2004 to 2008 including an undefeated season in 2007. His coaching career followed a successful playing career with Manu Samoa including three Rugby World Cup campaigns.
Sir John Kirwan
Age: 47
Playing career: 142 games for Auckland (1983-94) and 96 for the All Blacks, including 63 tests (1984-94). He also played for Italian side Treviso (1986-90) and NEC Green Rockets in Japan (1997-99) as well as a two-year stint in rugby league with the Warriors (1995-96).
Coaching career: Blues assistant coach (2001), Italy coach (2002-05), Japan coach (2007-2011), UK Barbarians coach (2012).
Kirwan scored 67 tries for the All Blacks and 199 in first-class rugby. He was denied 200 only because his swansong match for New Zealand Barbarians was not granted official status.
Japan won 31 of their 55 games under Kirwan's tenure for a 55.18 per cent winning record.