The 34-year-old has signed a two-year deal at Aggborough and will be assisted by Jimmy O’Connor, who is stepping up from his role as academy coach.
Penn, who made more than 200 appearances during two stints at Harriers as a player, had impressed the club’s board since taking caretaker charge of the first-team following Jimmy Shan’s departure in February.
With the National League North season now finished due to the coronavirus, they have moved quickly to secure his appointment on a permanent basis.
Penn said: “I’m so proud to be named manager of Kidderminster Harriers.
“Everyone knows this is my club. I’m a local lad and I know what it means to the people of the town.
“I’ll be doing everything in my power to succeed here and I know the fans will be right behind me.”
Though no shortage of doubt remains over precisely when football will resume, Penn and O’Connor will hold video calls with every member of the Harriers squad early next week to outline plans for the future.
Their appointments are expected to be the first of several in the coming weeks as new owner Richard Lane stamps his mark at Aggborough.
Lane, who completed a takeover of the club last October, has been working together with interim chief executive Neil Male on a large-scale restructure as they look to lay the foundations for future success.
Harriers ended the season 16th in the table, with Penn their third manager of the campaign after Shan and John Pemberton, the latter having resigned in November.
Male said: “Both Richard and I want stability for the club. Having had more than five managers in 18 months, there’s a need to put foundations in place. Jimmy and Russ have our backing to do that.
“I’ve seen personally Russ develop and grow in stature during his spell as interim manager and with the support of Jimmy I know they are people who can bring success back to Kidderminster Harriers.”