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Allen, 48, was sacked by the Gills in October with the club lying 17th in League 1.
He succeeds Edgar Davids in the Barnet hotseat, the former Netherlands international having quit The Hive in January.
For Allen, who led Gillingham to the League 2 title last season, this will be a fourth spell in charge of the Bees.
Allen's contract runs until the end of next season.
He told Barnet's website: "I’m really looking forward to the challenge of helping Barnet return to the Football League.
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