Blackpool-born former Seasider appointed head coach of League Two strugglers
Beech will be tasked with turning round the fortunes of the Cumbrians, who are fourth from bottom in the fourth tier.
The former midfielder replaces Steven Pressley, formerly of Fleetwood Town, who was axed earlier this month.
Beech has signed an 18-month contract at Brunton Park.
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Hide AdIt comes just five months after Beech was linked with the assistant manager's role at Bloomfield Road prior to Terry McPhillips' departure.
Both Beech and fellow former Seasider Andy Preece had been rumoured to replace Tony Grant, who left Blackpool to become number two to Robbie Fowler at Australian side Brisbane Roar.
However, McPhillips soon opted to step down and was swiftly replaced by Simon Grayson.
Beech began his career with the Seasiders, coming through the youth ranks before making his senior debut in 1993.
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Hide AdThe Blackpool-born former midfielder left to join Hartlepool United three years later after making 82 appearances at Bloomfield Road.
Beech has most recently been at Rochdale, where he was the assistant to Keith Hill.