The 62-year-old Swede, who attended the Foxes npower Championship game against Scunthorpe at the Walkers Stadium on Saturday, has signed a two-year contract.
Milan Mandaric promised a quick appointment following the dismissal of Paulo Sousa on Friday and the Leicester chairman has stayed true to his word.
Sousa was sacked following a dismal start to the season that saw the Foxes lose six of their opening eight league matches, including a heavy 6-1 defeat at Portsmouth.
Former England boss Eriksson, who managed Manchester City and was director of football at Notts County last season, will officially start work on Monday when the club leave for a week-long tour of Thailand.
Eriksson will become the Foxes 15th manager since 2004 while Leicester will be the 12th managerial role of Eriksson`s glittering career.
His most recent job saw him lead the Ivory Coast at this summer's World Cup finals in South Africa.
Leicester are currently 22nd in the Championship table with eight points.
Speaking at his official unveiling at the Walkers Stadium on Sunday morning, Eriksson revealed no discussions were ever held with Liverpool or Aston Villa regarding their recent vacancies despite media speculation linking him with the roles. And the Swede repeatedly stressed the ambition of Leicester as the main reason for drawing him to the East Midlands for a second time after his spell as director of football at Notts County.
He said: "The ambition of the club attracted me. I met the chairman and the owners a couple of days ago and they explained to me what they wanted to do. I want to manage in the Premier League again, that's why I'm here."
Source: PA
Source: PA