Newport have won just one of their last seven league matches following their 0-0 home draw with Crewe last weekend and are currently staring down relegation after a poor start to the season.
The side sit dead bottom of the league, 3 points away from 23rd place Cheltenham. Fuchs will take charge of the side desperate to avoid dropping down in a move that chairman Huw Jenkins says is perfect for the club.
"We see Christian as the sort of man to lead our club forward. I believe he matches our ambition and goals for Newport County.
"I do feel we can now look forward with a great deal of optimism. We'll look to improve our current situation in League Two and take things from there.
"Christian is ambitious and wants, one day, to manage in the Premier League. We believe he shares our strong belief in what Newport County can eventually become."
Fuchs was part of the Foxes' unprecedented Premier League title triumph in his first season and has since had stints at Charlotte FC as a player and assistant, which is experience that could prove helpful to Newport.
Fuchs, who won 78 caps for Austria, will begin his first managerial role with a trip to Oldham Athletic on Saturday afternoon as fans look to the former Leicester man to save them from dropping down.