Barbee replaces Keno Davis, who was fired earlier this month after nine seasons with the Chippewas.
"Coach Barbee met all the criteria we had to find the right individual to re-energize our men's basketball program and get us back to competing for championships," Central Michigan Athletics Director Amy Folan said.
"He is a proven championship-caliber head coach, an elite recruiter who is well-versed in the national landscape and has a strong background in providing a great student-athlete experience on and off the court. I think the responsibility that coach John Calipari gave Tony to help run the Kentucky program speaks volumes."
A former head coach at UTEP and Auburn, Barbee spent the past seven years under John Calipari at Kentucky. He has played a part in landing several highly ranked recruiting classes and has helped with both X's and O's and player development. Barbee also spent time under Calipari as an assistant coach at Memphis.
As a head coach, Barbee went to one NCAA tournament in eight seasons. He was successful at UTEP, improving in each of his four seasons at the helm, culminating in a Conference USA championship and NCAA tournament appearance in 2010.
Barbee was then hired by Auburn, but he struggled in the SEC. The Tigers failed to make the postseason during his four-year tenure.