Pruitt, 43, officially will be introduced as the Volunteers' 26th head coach on Thursday night.
"Six days ago, I mentioned several attributes that I sought to find in the next leader of our football program, and Coach Pruitt meets all criteria," Tennessee new athletic director and former coach Phillip Fulmer said in a statement. "I'm certain he appreciates the unique opportunity to lead a program of Tennessee's caliber. He's driven to win at the highest level. He will honor our university's values, operate with integrity and be a role model for our student-athletes.
"I know Coach Pruitt will hit the ground running and go to work restoring our program to a championship level."
Pruitt has been the defensive coordinator with the Crimson Tide for the past two seasons. Alabama is ranked first nationally in scoring defense this season and second in total defense.
ESPN reported that Pruitt intends to stay with the Crimson Tide through the College Football Playoff. Fourth-ranked Alabama plays No. 1 Clemson in the Sugar Bowl on New Year's Day.
A two-time Broyles Award finalist as the top assistant coach in college football, Pruitt served as a defensive backs coach in Tuscaloosa from 2007-2012 before being named as the defensive coordinator at Florida State in 2013. He then was the defensive coordinator at Georgia in 2014-15 before returning to his alma mater.
Pruitt becomes the fifth head coach at Tennessee in the past 11 years. He replaces Butch Jones, who was fired after posting a 34-27 overall mark, including 14-24 in SEC play, during a five-year span.
The move to hire Pruitt ends a chaotic stretch in which Tennessee came close to hiring Ohio State defensive coordinator Greg Schiano in late November. The school and Schiano agreed to a deal on Nov. 26, but the Volunteers backed out after fan backlash.
Tennessee's coaching search then ranged from Oklahoma State's Mike Gundy, Duke's David Cutcliffe, Purdue's Jeff Brohm, North Carolina State's Dave Doeren and Washington State's Mike Leach until athletic director John Currie was fired last week.
The school hired Fulmer to take Currie's place on Friday.