The 40-year-old American previously managed in Europe and will be both the head coach and control player personnel decisions.
Berhalter joins the Crew after a nearly two-year stint with the Swedish club Hammarby, where he engineered a trunaround in the first year, going from 12th position to fourth. He was fired by the second-division team during the second year for being too defensive.
The defensive style hasn't frightened away new Crew owner Anthony Precourt, who has not only named Berhalter manager but also made him the club's first Sporting Director, which will oversee all player personnel decisions. For his part, the coach says he will try to bring a style of play the Crew's supporters will enjoy.
"I am excited about the opportunity to join one of Major League Soccer’s original clubs," Berhalter said in a news release. "The Crew has a strong history of winning and a dedicated fan base, and I aim to bring a style of play that resonates with our supporters and results that will make the city proud."
The job became vacant when Robert Warzycha was fired in early September. Technical Director Brian Bliss took the job on an interim basis and was thought to be a strong candidate for the position after he went 4-4-0 and nearly led the club to a MLS Playoff berth.
“We feel that now is the appropriate time for full-scale changes to our soccer operations, and unfortunately Brian’s departure is a part of that process," Precourt said in the release. "We thank Brian for all of his hard work and dedication, and we wish him the best moving forward.”