(CNN) -- Louis van Gaal was appointed coach of the Dutch national team Friday in succession to Bert van Marwijk who resigned last week after their disappointing Euro 2012 campaign.
Van Gaal will be taking charge of the Oranje for the second time, having had a previous 14-game tenure at the turn of the century.
"Van Gaal has signed a contract that will link him from August 1 this year until the end of the World Cup in 2014," a statement on the official Dutch football federation (KNVB) website read.
Van Marwijk, who steered the Netherlands to the final of the 2010 World Cup, departed after their exit at the group stages of the European championships in Poland and Ukraine. They lost all three of their matches.
A number of men were linked with the job, including other former national coaches in Frank Rijkaard and Guus Hiddink, but the KNVB opted for the 60-year-old van Gaal.
"We were looking for a trainer with a wealth of experience, with personal and technical expertise," said KNVB director Bert van Oostveen.
"Van Gaal earned his spurs not only nationally, but internationally as well and we know him as a dedicated and highly driven coach," van Oostveen added.
Van Gaal has been out of the game since being sacked by Bayern Munich last year, having led them to the Champions League final in 2010.
He has also had spells at Catalan giants Barcelona and Ajax Amsterdam, where he forged his reputation by leading them to a hat-trick of Dutch league titles from 1994-1996 and the European Champions League in 1995.
"It's the challenge I have been waiting for," said van Gaal as he gave his reaction on the official website.
In his previous spell in charge he succeeded Rijkaard in 2000 and took the national team to 12 wins from 14 games.
But he resigned in 2001 when they failed to qualify for the final of the 2002 World Cup in South Korea and Japan.
Van Gaal will be looking to correct that in qualifying for the next World Cup in Brazil in 2014.
Raymond Verheijen, a former member of the Dutch national coaching staff, gave his reaction on Twitter to the appointment.
"Hopefully, the Dutch FA have analyzed both the current/future Dutch squad & the style of Van Gaal before they decided to go for this option," he tweeted.
Van Gaal has established a reputation for tactical acumen and his ability to rebuild teams, but has a forthright approach and an often frosty approach to the media.
He has appointed former Ajax star Danny Blind as his assistant.