Guus Hiddink will take over from Louis van Gaal as Netherlands coach after the World Cup finals, the Dutch Footall Federation (KNVB) announced on Friday.
Hiddink, 67, will bring in former internationals Danny Blind and Ruud van Nistelrooy as his main assistants. He had already indicated this month that he would return.
Hiddink was in charge of the Dutch team that came fourth at the 1998 World Cup. He ended that three year stint shortly after the finals.
Hiddink will coach the side until the 2016 European championships in France and former Sparta Rotterdam and Ajax defender Blind, 52, will then take over until the 2018 World Cup in Russia, the KNVB said.
Former striker Van Nistelrooy, 37, played with clubs including Manchester United and Real Madrid.
"It's an honour to return as coach of the Netherlands," Hiddink said in a statement released by the KNVB.
"With Danny Blind and Ruud van Nistelrooy, we also have a solid team with a great knowledge of football and experience."
Hiddink is a national hero in South Korea after taking the national side to fourth place at the 2002 World Cup finals they co-hosted.
He has also coached Russia, Turkey and Australia and top clubs Real Madrid, PSV Eindhoven and Chelsea. Hiddink left the Russian club Anzhi in July 2013.
Van Gaal, 62, had already indicated he would leave after the 2014 World Cup in Brazil.
The Netherlands were runners-up at the 2010 World Cup but slumped to three defeats in as many matches at Euro 2012.
They are drawn in Group B for the World Cup with title-holders Spain, Chile and Australia.
For Euro 2016 they are in Group A qualifying group with the Czech Republic, Turkey, Latvia, Iceland and Kazakhstan.