The Dubliner, who guided Dundalk to four SSE Airtricity League Premier Division titles in the last five seasons, will also be responsible for overseeing the underage international teams.
Kenny is one of the most successful Irish managers of all time, having enjoyed spells in charge of Longford Town, Bohemians, Derry City, Shamrock Rovers and Dundalk, which included a historic run in 2016 to the UEFA Europa League group stages with The Lilywhites.
To date Kenny has managed 46 games across the UEFA Champions League and UEFA Europa League amassing 18 senior titles in Ireland along the way.
Kenny is excited about the challenge of international football and said:”I consider it a huge honour to be appointed manager of the Ireland Under-21 team.
“I’m delighted with the position I have been offered and I’m looking forward to the next four years and beyond. I’m excited to get started and work on developing and nurturing the next group of talented players.”
FAI High Performance Director Ruud Dokter said:”We are delighted to bring Stephen in as Under-21 manager and to support me overseeing the underage international teams.
“Stephen has proven himself to be one of the best managers in Irish footballing history and his experience, enthusiasm and expertise will undoubtedly benefit Irish football going forward.”
Kenny will be the Under-21 manager for a two-year period before taking over from Mick McCarthy as senior team manager after EURO 2020.