Donaghey, who is currently in Lanzarote on holiday, will be in the 'Stute dug-out for the first time as head coach for their home clash against Dundela, on Saturday, September 4th.
Having been at the club on a number of occasions both as a player and as a coach, Donaghey, was Paddy McLaughlin's number two with the Drumahoe side, before he followed the Creggan man at Cliftonville in 2019 to take a similar role at Solitude.
The club confirmed the news earlier this afternoon that they had found a replacement for Sean Connor, who departed last week.
"Institute FC are delighted to announce the appointment of Brian Donaghey as our new Head Coach," stated the club's statement.
"Brian was an integral part of our 2017/2018 NIFL Championship success following the devastating flooding of the Riverside Stadium
"Following our promotion to the 2018/19 NIFL Premiership, Brian also helped steer the first team to an excellent eighth place finish, with the club just missing out on a European Qualification playoff place by just four points.
"He has coached at Northern Ireland U18 level and developed an excellent record and reputation at youth level before moving to Senior Football with Institute and Cliftonville.
"The Institute Board are convinced of Brian’s motivation, commitment, and coaching ability, and we believe this appointment is great news for both the current cohort of senior players and for young talented local players who may have aspirations to play for Institute Football Club."