The former Netherlands international will take Dick Advocaat's place this summer after previously coaching the Eindhoven side on an interim basis in 2012
The Eredivisie side were in the market for a new trainer due to the departure of Dick Advocaat, who announced last week that he would not extend his expiring contract with PSV, and they have not wasted any time to find a replacement.
Cocu, 42, was previously in charge of PSV at the end of the 2011-12 campaign when he replaced Fred Rutten on an interim basis, but then stepped down to coach their Under-19 team as he felt he was not ready for the position of head coach just yet.
"I enjoyed my spell as interim coach. It was a good experience. The choice to take charge of the U-19 team then gave me the chance to have a look at the youngsters in the club's youth academy and it was important for me to lead a team like that," Cocu stated at a press conference.
"I am now ready to do the same thing with the first team. When I start something, I want to do it right and be ready for it."
Cocu enjoyed two spells with PSV during his active career and won four league titles with the Eindhoven side.