Lambert, whose best years as a player were spent with Celtic and Borussia Dortmund, kicked off his managerial career at Livingston, but made his name as a team boss at Wycombe Wanderers, leading them to the League Cup semi-finals in 2007.
He moved to Colchester and then Norwich City, whom he guided from League One to the Premier League with successive promotions.
In 2012, he moved to Aston Villa and he kept them in the top flight for two seasons before losing his job in February 2015.
He became Blackburn boss in November last year and kept them in the Championship, but he quit at the end of the season.
Lambert will be officially introduced to the media at a press conference at Molineux tomorrow afternoon.