Pearson leaves Leicester City to takeover a the Tigers, with coaches Craig Shakespeare and Steve Walsh joining him at the KC Stadium.
Milan Mandaric, the Leicester chairman, said Pearson moved to East Yorkshire with his blessing.
"Nigel's done a fantastic job. It would have been wrong of us to deny him the chance to speak to another club," he said.
"I am deeply grateful to Nigel for everything he has done for the club. He has put together the foundations of a strong squad and it is now up to us to find a manager to build on those foundations."
Hull were relegated from the Premier League last season, ending a two-year stint in the top division.
Nicky Bailey has passed a medical at Middlesbrough, meaning his move to the Riverside Stadium now appears a formality. The Charlton midfielder agreed terms last week.
"Nicky was here on Monday and has had his medical and that's all fine, so he should be signing for us soon," said Gordon Strachan, the Boro manager.
"That's great because he's got something we've needed for a long time. He's got drive, determination and motivation and he can score goals."
Crystal Palace have signed defender David Wright, 30, on a free transfer from Ipswich Town.
He has penned a two-year contract with the Eagles, becoming the first signing of new manager George Burley.
Jake Buxton, the 25-year-old Derby County defender, will miss most of his side's pre-season programme as he has to have surgery on a groin problem.