The 69-year old Dutchman has signed a deal that would see him manage his national team until World Cup 2022 which is to be held in Qatar.
It is the third time Van Gaal has taken charge, the first time being from 2000-2002 and then from 2012-2014. In 2014, he lead the Netherlands to a third-place finish at the World Cup in Brazil.
"Dutch football has always been close to my heart and coaching the national team is a key position for moving our football forward," said Van Gaal.
The Netherlands have three World Cup qualifying matches in September when they’d look to rebuild from their upsetting Euro campaign.
"There is little time until the next qualifiers so the focus is therefore immediately 100% on players and what approach we will take," he added.
“We have in the coming months ahead of us the assignment of qualifying for the World Cup,” said the Dutch football federation’s director Nico-Jan Hoogma. “We have little preparation time and given this, we were looking for a coach with exceptional qualities, who can also quickly anticipate and for whom coaching the national team does not hold any secrets. With his experience and record at the highest level, we identified Louis van Gaal.”
Over his 30-year coaching career, the former Manchester United boss has won 20 major trophies. In that period he also managed Ajax, Barcelona, AZ Alkmaar and Bayern Munich.
Van Gaal will have the former national-team coach Danny Blind and Sparta Rotterdam head coach Henk Fraser as his assistants. Frans Hoek is also set to be named the goalkeeping coach.