The former England midfielder guided Spurs to a 3-2 win at Southampton on Sunday as interim boss and has now been handed a contract until the end of the 2014-15 Premier League season. In fairness to Tottenham Chairman Daniel Levy, he has wasted no time in filling the vacancy left by Andre Villas-Boas, who was sacked last week.
"We believe Tim has both the knowledge and the drive to take the squad forward," Levy told the club's official website.
Sherwood, who won three caps for England, joined Tottenham as a player in 1999 from Blackburn, where he won the Premier League title in 1995.
He left White Hart Lane in 2003 and moved to Portsmouth but returned as part of the club's coaching staff in 2008 under manager Harry Redknapp.
Sherwood was working as technical co-ordinator when chairman Levy asked him to look after the first team following the departure of Villas-Boas. He made several changes to line-up and style and this may have prompted the decision to give him the job. Striker Adebayor was recalled and responded with a brace
Former Tottenham manager and TV pundit, David Pleat said:
"He is ambitious and a leader. I look back to when he was at Blackburn with Alan Shearer, David Batty, Chris Sutton and Graeme Le Saux - some big players - but he was the leader and spoke for the team.
"He is a hard-working guy. He has developed and helped develop some good players that have emerged this season."