Sunderland take a gamble on survival with Paolo Di Canio

Black Cats act swiftly with appointment of Italian on two-and-a-half-year deal after Martin O'Neill's sacking

Paolo Di Canio was last night appointed as head coach of Sunderland (Getty Images)

Paolo Di Canio was tonight appointed as head coach of Sunderland following the sacking of Martin O'Neill yesterday after the defeat by Manchester United.

Di Canio has signed a two-and-a-half-year deal to succeed O'Neill at the Stadium of Light, his first job in football since he resigned at Swindon Town following a row about the sale of a player in February. The 44-year-old and his representative met the Sunderland board tonight at the Academy of Light, the club's training ground, and a deal was concluded at 9pm, with the former West Ham forward eager to take over a club just one point above the relegation zone.

Sunderland have failed to win any of their last eight Premier League games, picking up just three points in the process during a slide down the table and owner Ellis Short acted on Saturday night in an attempt to stop the club from being relegated following the 1-0 defeat to United.

Short called Martin O'Neill to tell him of his dismissal shortly before a club statement was released at 9.25 pm on Saturday night that said the "club had parted company" with the 61-year-old.

On Di Canio's appointment, Short said: "The sole focus of everyone for the next seven games will be to ensure we gain enough points to maintain our top flight status. I think that the chances of that are greatly increased with Paolo joining us. Our fans continue to inspire all of us in our drive to give them the successful club they deserve. That remains our primary aim."

Di Canio's first game in charge of Sunderland will be at Stamford Bridge next week to face Chelsea and in a baptism of fire he will next face Newcastle at St James' Park in the Tyne-Wear derby, before Everton at the Stadium of Light and Aston Villa away make up his first four games.

The Italian left his position as manager at Swindon following a row over the sale of star winger Matt Ritchie to Bournemouth. He had led the club to the League Two title and the Football League trophy final at Wembley, where they were beaten by Chesterfield.

Di Canio's appointment caused the former foreign secretary David Miliband to resign from his post as vice-chairman and non-executive director of Sunderland, citing the new head coach's "past political statements" as the reason, a direct reference to the Italian's much-publicised fascist views.

But Di Canio's desire and self-belief about being up to the challenges of managing in the top flight has never been in doubt and he said after he left Swindon: "I believe I am at a stage now where I am a Premier League or Championship manager."

The sacking of O'Neill, who has repeatedly called for more time to make the side his own, drew anger from the Liverpool manager Brendan Rodgers. "I was very surprised," he said. "Whenever someone of the status of Martin O'Neill loses his job, then we all have to be on the back foot. This is a guy who has many years' experience, went to Sunderland and picked them up off their knees. OK, they are going through a difficult time, but he is still a top-class manager.

"I think some clubs need to be careful. They need to understand where they are at. They won't always be on the front foot. There are some times when the club just has to be stable and guys like Martin O'Neill losing his job, it's a sad day."

O'Neill – who was interviewed for the England manager's job in 2007 but missed out to Steve McClaren – has already been linked with succeeding Giovanni Trapattoni as the Republic of Ireland manager.