Flitcroft, 38, has guided the Tykes to two wins in three matches since taking charge on a caretaker basis following the sacking of Keith Hill on 29 December.
A statement on the club's website read: "The Board of Barnsley FC are pleased to announce the appointment of David Flitcroft as first team manager.
"It is clear that David has the passion, personal dedication and the commitment of the players that are essential if we are to maintain our nPower Championship status.
"To be successful, David will also need the support of the fans and we ask that all those who care about Barnsley FC show unity and get behind David and the Reds."
Flitcroft, who was assistant manager to Hill, was installed as the odds-on favourite to be given the job permanently after Barnsley's attempts to attract Terry Butcher and Sean O'Driscoll to Oakwell failed.
Speaking after Saturday's 2-0 home win over Leeds, he said: "I have found out a lot about myself in the last 10 days. It could change the way I look at myself for the rest of my career.
"When you lead a group and they are all playing for you, it's different. I'm not going to walk out on that group of players.
"If I get sacked, I get sacked, but I've been taught well and you don't walk out on people."
Flitcroft began his playing career as a defender at Preston and also had spells with Chester, Rochdale, Macclesfield and Bury before returning to Rochdale to join Hill's coaching staff.
He moved on to Barnsley along with Hill in June 2011.