TIte has been appointed the new coach of Brazil, the Brazilian Football Confederation (CBF) confirmed on Monday.
The 55-year-old succeeds Dunga, who was sacked last week after the Selecao were eliminated in the first round of the Copa America for the first time since 1987.
Their early exit came one year after defeat on penalties to Paraguay saw them crash out of Copa America 2015 during the first knockout stage.
Dunga, who led the national team between 2006 and 2010, returned in July 2014 to succeed Luiz Felipe Scolari following the infamous 7-1 World Cup semi-final defeat to Germany.
He guided Brazil to 13 consecutive friendly victories but managed just four wins in 13 competitive matches.
TIte has carved out a reputation as Brazil’s best coach after leading Corinthians to six major titles in two spells with the Sao Paulo-based giants including the club's first ever Copa Libertadores and Club World Cup crowns.
He bid an emotional, on-pitch farewell before their 3-1 league victory over Botafogo on Sunday.
"I was leaving the airport and someone said, ‘Tite, now there are 200 million [fans] watching you',” he told a press conference on Monday.
“I'm aware of my responsibility, but I am prepared and I aim to keep improving.”
Dunga had been scheduled to lead Brazil into August’s Olympic Games in Rio de Janeiro but Under-20 coach Rogerio Micale will now oversee the quest for a gold medal on home soil.
Tite will subsequently take charge for the first time when World Cup qualifying resumes in September.
Brazil, the only nation to have appeared at every World Cup finals, sit outside the qualification slots in CONMEBOL’s 10-team group, lying in sixth place after just two wins from six matches.
“Our focus it to qualify for the World Cup, and we're not there right now,” Tite said.
“I believe our work will get us there, but of course there's a risk of not achieving that.
“We will be running from reality if we don't face up to the possibility. And I'm here because the results have not arrived."
Tite has been replaced at Corinthians by former Brazil international Cristovao Borges.
- Goal