Sion confirmed on their website that they had reached an agreement for the 55-year-old to coach the club for the rest of the season.
Schuermann, who had taken over in October and was in charge for five league games, became Christian Constantin's latest victim on Monday when the eccentric club president decided not to renew his contract which ran until the start of the mid-season break.
Swiss media had included former England manager Sven-Goran Eriksson and Brazilian Zico as possible replacements.
Michel Decastel and Sebastien Fournier have also coached Sion this season. The club began the year under the leadership of Laurent Roussey, who was followed by Rolland Courbis and current Lazio coach Vladimir Petkovic.
Munoz had the distinction of being the last coach of Swiss club Neuchatel Xamax. The club was expelled from the league at the start of the year due to financial irregularities by its Russian-born owner Bulat Chagaev.
Munoz, who has also coached teams in Greece, Russia and his homeland, won 60 caps for Spain between 1981 and 1988.