Holtmann had been coaching the Bulldogs with an "interim tag" after Brandon Miller was granted a medical leave of absence in October. Miller, 35, was entering his second season as the Bulldogs' coach.
Prior to joining Butler as an assistant in 2013, Holtmann served as the head coach at Gardner-Webb for three seasons. He was named Big South Coach of the Year after leading the team to 21 wins in 2013.
Holtmann, 43, has reportedly agreed to a multi-year deal with Butler.
"Chris has provided important leadership and coached successfully in a difficult situation. He has fully embraced the Butler Way and we are confident in the future of our basketball program with Chris at the helm," athletic director Barry Collier said in a news release. "We want to thank Brandon Miller for his many contributions to Butler over the last 18 months, and wish him well. Out of respect for Brandon and his privacy, we will have no additional comment."
"I am honored to be named the Head Coach at Butler University and it is a real privilege to serve the University in this capacity," Holtmann said. "I would like to thank President Danko and Barry Collier for their significant leadership and guidance during these last few months. I would also like to thank our staff and players for their incredible support and hard work. This is a special place and a program rich in tradition. We look forward to working extremely hard to make the Butler community proud in the coming years. We are grateful to Brandon for his leadership and he will always be an important part of Butler Basketball. He and his family remain in our program's thoughts and prayers."
Butler opened Big East play on Wednesday with a 12-point loss at No. 6 Villanova. The Bulldogs (10-4) are in their second season in the conference since leaving the Atlantic 10 in 2013.