Velazquez 40 is not unfamiliar with La Liga football after coaching at Villarreal and Real Betis while they were in the second division. He has also coached in Italy with Udinese and had stints at Belenenses, Vitoria Setubal and Maritimo in Portugal. He left Maritimo in November after a poor start to the season.
He now has eight games remaining in the Spanish league to save Alaves from relegation.
Velazquez will be taking over a team six points from safety after Saturday's 4-1 loss at Atletico Madrid.
Velazquez's first game in charge comes against Osasuna on Sunday having won just once in their past 18 matches.
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