The 62-year-old will take charge ahead of the 2014-15 Premier League season following the end of the Netherlands' involvement in the World Cup.
Ryan Giggs will remain at Old Trafford as Van Gaal's assistant manager after taking charge on an interim basis following the sacking of David Moyes.
Van Gaal, Giggs, Ed Woodward and club owners the Glazers have had their say on the appointment, and the Dutchman is keen to "make history" at Old Trafford.
Louis van Gaal
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Ryan Giggs, assistant manager
"I am thrilled to have the chance to serve as assistant manager. Louis van Gaal is a world-class coach and I know I will learn a lot about coaching from being able to observe and contribute at such close quarters. Manchester United has been a huge part of my life and I'm delighted to be able to continue that relationship in such a key role."
Ed Woodward, executive vice-chairman
"In Louis van Gaal, we have secured the services of one of the outstanding managers in the game today. He has achieved many things in his career to date and Old Trafford provides him with a fitting stage on which to write new chapters in the Manchester United story.
"Everyone is very excited about this new phase in the club's history. His track record of success in winning leagues and cups across Europe throughout his career makes him the perfect choice for us.
"People know him as a larger than life character but I have also been extremely impressed by his intelligence, thoughtful approach to the role and his diligence. I'm looking forward to working with him.
"I'm delighted that Louis has chosen Ryan as his assistant. Ryan's association with the club spans over two decades and his knowledge and stature will be of great use to Louis. In addition, this is a fantastic opportunity for Ryan to learn his trade alongside a world-class manager whose attacking instincts and belief in youth are tailor-made for Manchester United.”
Joel Glazer, part owner
"I am delighted that Louis will be our next manager. He has an outstanding pedigree as a coach, both as a man who motivates his teams to win trophies and as someone who believes in giving young players a chance to prove their worth. I am sure he will make a big impression on the club, the players and the fans."
Avram Glazer, part owner
"Louis joins us at an exciting time and has already communicated some great ideas for how the club can move forward. The board is right behind him in his plans and everyone here is already looking forward to the start of next season.”