Kim, who has signed a two-and-a-half year contract, led South Korea's Ulsan Hyundai to the continental title in December before standing down from the role after four seasons at the helm.
"I am delighted to be joining the Lion City Sailors," said Kim, according to the club's website.
"It's hugely exciting to be part of such an ambitious project - the club has aspirations of becoming one of the top teams in the region, and I'm confident of delivering that success to the Sailors."
Kim replaces Australian coach Aurelio Vidmar, who stepped down in April, and he takes over at a club that has made waves in recent months.
The Sailors smashed the Singapore Premier League transfer record in January to sign Brazilian midfielder Diego Lopes for 1.8 million euros ($2.20 million) from Portuguese side Rio Ave.
Lion City Sailors are currently second in the Singapore Premier League standings, one point behind leaders Albirex Niigata (S).