The 41-year-old has signed a deal until 2012, and left Sporting last year after four seasons in charge.
The former Portuguese international, who played 35 games for the side, will need to galvanise a side low on confidence after a slow start to Euro 2012 qualifying, with his first game coming on October 8 against Denmark.
The FPF will hold a news conference on Wednesday to officially unveil the new team.
Queiroz was suspended following his interruption of a doping testing session, and had originally been given a one month suspension by the FPF in late August, only for Portugal's anti-doping authority to extend the ban to six months.
Queiroz and his Portuguese international players were the subject of a surprise, yet routine, visit by anti-doping doctors in late May, and the 57-year-old has admitted to agressive verbal behaviour in their presence.