The former Strasbourg, Crystal Palace, Lens, Werder Bremen and Bayern Munich defender has agreed a deal until the end of the season, the club confirmed.
The 51-year-old has previously coached in Germany, Greece, Austria, England and Turkey, but has never coached in his native France.
Ismael has been without a club since leaving Blackburn Rovers last February after a year in charge with the Championship club mired in a relegation battle before his departure.
He faces a daunting task at Le Havre, who have just two points from 10 games and are propping up the bottom of the league.
His first match in charge will be crucial in the fight for survival away at relegation rivals Troyes on November 20th.
Previous coach Didier Digard kept the Normandy team in the top flight over the previous two seasons despite limited resources, but was sacked at the end of October.