The move comes after a 1-1 draw with Augsburg at the weekend left Hertha 14th in the Bundesliga table, just a point ahead of the relegation play-off position.
"We would like to express our thanks to Pal Dardai for his work," said Hertha's sporting director Fredi Bobic on the club's website. "He took charge of the team in a difficult situation last season and kept us up in challenging conditions."
Korkut, who played 25 times for Hertha in the 1999/2000 season, will now be tasked with lifting the club away from the lower regions of the league.
"We hope that Tayfun Korkut will now give the team a boost and bring in some fresh ideas," continued Bobic. "Tayfun has already proven in the past that he can not only stabilise a team, but also work in great detail and with great passion to further his own vision of football."
Korkut's first game in charge comes on Sunday in Stuttgart, close to where he was brought up and took his first steps in coaching after a playing career which included spells with Stuttgarter Kickers, Fenerbahce, Real Sociedad, Espanyol and Besiktas.
The 47-year-old was responsible for youth teams at Hoffenheim and then Stuttgart before becoming assistant coach of the Turkey national team in 2012. He then worked in the Bundesliga at Hannover and had spells in charge of Bayer Leverkusen and Stuttgart.
"I would like to thank Fredi Bobic and all of those responsible at Hertha for the faith they are vesting in me," Korkut said. "I'm really full of energy and looking forward to this exciting new challenge."