The former Manchester United and Real Madrid player will become the manager of PSV Eindhoven in the summer.
Roger Schmidt will leave at the end of the season when his contract ends, and he will be replaced by Van Nistelrooy.
It has always been Van Nistelrooy's dream to be the head coach at PSV.
He scored 62 goals in 67 matches for PSV between 1998 and 2001 before moving to United, where he scored a title in five years.
After moving to Real Madrid, Dutch forward Van Nistelrooy won the La Liga and the League Cup, as well as the FA Cup.
He was an assistant manager of the Netherlands national team for two years and has also been in charge of PSV's youth and reserve sides.
I have worked with Toon Gerbrands, PSV's current general manager, the past few seasons, and I was convinced I could do it.
Life is not completely manageable when things go your way. This is a good time to take the next step.
PSV are ready to embark on a new path this summer and I am ready to play my part.
Talks with the board of directors reinforced the idea that we are ambitious and want to create something special in the long term. I am looking forward to the task at PSV.
They have been the Dutch champion 24 times, but not since last year.
The first leg of the quarter-finals of the Europa Conference League will be played on Thursday, 7 April at the King Power Stadium before the second leg will be played a week later at the PSV Stadium.
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