After negotiations with Croatia coach Slaven Bilic fell apart, Zola was contending for the vacancy alongside former Italy boss Roberto Donadoni and ex Hibs manager John Collins before the final decision was taken.
"Gianfranco was our first choice," a West Ham senior official told BBC Sport.
"We were very comfortable wit the three options we had but Gianfranco came out on top."
The West Ham job will be Zola's first ever coaching role, as his only experience was working assiting Italy U21 coach Pierluigi Casiraghi.
"It is true he has no experience in managing a club side, but he knows the Premier League very well," the source added.
It is well worth noting that the former Chelsea legend will be West Ham's first ever foreign coach.