O'Neill will remain manager of Northern Ireland for the World Cup qualifying play-off against Italy in March and, should they cause an upset by going through, for the play-off final too.
O'Neill will be in the stands for Blackburn's trip to QPR on Saturday, with former Northern Ireland midfielder Damien Johnson at the helm for one more game as caretaker boss after Valerien Ismael was sacked on February 2nd.
Blackburn currently stand 22nd in the 24-strong Championship, with the bottom three relegated at the end of the season.
But they are level on points with Leicester, just above the relegation zone, and Rovers have a game in hand over the Foxes going into the weekend.
O'Neill thanking the Irish FA for agreeing to his latest joint role, added in a statement: "It also gives me closer visibility of players operating in the Championship, where a significant number of our squad are competing week in, week out."
The arrangement is similar to the one which saw O'Neill take charge of Stoke in late 2019, while initially remaining as Northern Ireland manager.
"Blackburn Rovers is a historic Premier League-winning club with a proud tradition, and the chance to work at a club of that stature is one I felt was important to embrace," O'Neill said.