Defender Jonathan Spector has extended his stay at Birmingham after penning a new two-year deal.
Bastian Schweinsteiger’s Bayern Munich future remains in doubt after Matthias Sammer admitted he could leave the club.
The 44-year-old, who had been working at Leeds University, will take the reigns of the club who were this season promoted to Norway's top flight.
"I am looking forward to putting my stamp on this job," Deane told the club's official website.
Deane won three caps for England and is famous for scoring the first goal in the history of the Premier League.