Babbel accumulated 51 caps for the German national team, winning the 1996 European Championships, throughout club spells at Bayern Munich (three Bundesliga titles), Hamburg and Liverpool, before he began coaching in 2007.
The 45-year-old arrives at the Wanderers after coaching appointments at VfB Stuttgart, Hertha Berlin, - where he won the 2.Bundesliga title - Hoffenheim and FC Luzern, where he managed Tomi Juric.
Babbel has a chequered record as a head coach, with a vastly superior win-record in his first season in charge than his second. In his first season of professional management at Stuttgart, Babbel had a 70% win record, which dropped to just 13% the next campaign.
Similarly, his two seasons at Hertha were 67% (admittedly in the second division) and 23% respectively. 
He was far more predictable at Juric's FC Luzern, finishing fifth, third then fifth again over a three season spell. 
Babbel becomes the third coach in Wanderers history after the five-year tenure of Tony Popovic and the subsequent tumultuous year under Josep Gombau.
Wanderers Chairman, Paul Lederer, said the appointment of Babbel was indicative of the club's objectives.
“Today we have made a statement about our future and I am very proud to announce Markus Babbel as our new Head Coach."
“In the next 18-months we will have our new training facility finished, our new stadium open and our club ready to take another giant.
“Having a coach like Markus involved with this club will make us a force in this league as we strive to win trophies, return to the AFC Champions League and make a statement not only in Australia but internationally as a football club.”