It is the second spell as national coach for Van Gaal, who has had success leading club teams such as Ajax, Barcelona and Bayern Munich but failed to lead the Netherlands to the 2002 World Cup the first time he was in charge of the team.
The Royal Dutch Football Association said on Friday that the 60-year-old Van Gaal has a contract until the 2014 World Cup.
Van Gaal calls the appointment "the challenge I have been waiting for."
