He will be assisted by Chris Ramsey and Les Ferdinand, with the fifth-round League Cup tie against West Ham United set to be their first match in charge this Wednesday.
The club also announced that Steffen Freund and Tony Parks would be continuing on the coaching staff but Jose Mario Rocha, Luis Martins and Daniel Sousa had all left the club.
Sherwood, who previously worked as Tottenham’s technical co-ordinator, will be in charge while the club “progresses discussions” in the search for a new coach, the club announced via its official twitter feed.
We can announce that Tim Sherwood, Chris Ramsey and Les Ferdinand will take charge of the First Team whilst the Club progresses discussions
Former Chelsea and Porto boss Villas-Boas had his contract with the club terminated early on Monday after his side fell to a 5-0 loss to Liverpool on Sunday afternoon but his position had been the source of much speculation since the 6-0 drubbing away at Manchester Cityat the end of November.
Spurs are currently seventh in the table, two points ahead of Manchester United, and won their Europa League group with a 100 per cent record, scoring 15 goals and conceding just two in six games.
Villas-Boas also had a good record overall as Tottenham manager, averaging 1.83 points per league match, and a win ratio of more than 53 per cent, the highest of all Spurs bosses in the Premier League era.
Although the Portuguese manager did spend heavily over the summer, to the tune of £108million with seven new players coming in as Tottenham reinvested Gareth Bale's enormous transfer fee, some of the signings appear to have been made over his head and that led to a breakdown in the relationship with the club's hierarchy.
Former Tottenham player Sherwood was recruited by another former manager Harry Redknapp and is believed now to be amongst a list of possible contenders to replace Villas-Boas.
However, bookmakers have installed former England manager Fabio Capello as the early favourite. Although he is currently Russia's head coach and due to take them to the World Cup finals, Franco Baldini, his former assistant at England, is Spurs' technical director, and Capello was at White Hart Lane on Sunday commentating for Italian television.
Other names linked with the post include former Tottenham striker Jurgen Klinsmann, currently coach of the USA, and a possible return for Glenn Hoddle - he was in charge at Spurs between 2001 and 2003 but has not been in club management since Wolves in 2006.
There are also whispers that Southampton's Mauricio Pochettino, who has been hugely impressive at St Mary's, has attracted Levy's admiration though he is known to be fiercely loyal to Saints chairman Nicola Cortese.
Guus Hiddink's agent has ruled the Dutchman out of the running - he is taking over as Holland coach after the World Cup.
Cees van Nieuwenhuizen told Press Association Sport: "I would be surprised if (Hiddink) went to Spurs. I could hardly imagine that happening.
"He has just signed a contract with Holland and he has also turned down offers from other countries recently to coach them at the World Cup so I wouldn't take any talk of Guus going to Tottenham seriously."
Swansea boss Michael Laudrup's agent has also insisted the Dane is committed to staying at his club until the end of the season.
Earlier, Harry Redknapp - sacked as Tottenham manager in 2012 after failing to qualify for the Champions League - had said Levy should have given his successor Villas-Boas more time.
Redknapp told talkSPORT: "I think people are over-reacting too quickly. You lose a couple of games now and you're in trouble, it shouldn't be like that.
"You either think somebody is good at their job or not and when you appoint someone you should give them time and let them do the job."
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