The Ajax boss will join the club from the end of the season until June 2025, with the option of a further 12 months.
It comes after a difficult season for the Reds, with a 4-0 defeat at Anfield signalling the scale of the task facing the 52-year-old manager.
Who is Erik Ten Hag?
He was born on 2 February 1970 in Haaksbergen - a small town in the Netherlands with less than 25,000 people.
Ten Hag had three playing spells at FC Twente; a major team in eastern Holland which is appropriately nicknamed ‘The Reds’.
He also played for De Graafschap, RKC Waalwijk and Utrecht and made 336 appearances in a 13-year senior career.
Ten Hag was an onfield coach from his early days, spending a a decade learning the coaching ropes at Twente.
He was head of training there and at PSV Eindhoven before his first managerial post at Go Ahead Eagles in 2012.
Under his leadership, the club won a first promotion to the Eredivisie for 17 years, but Ten Hag promptly resigned to coach the Bayern Munich second team, joining Pep Guardiola.
Speaking about his now rival Guardiola, Ten Hag said he "learned a lot from him" during that time.
Ten Hag rejoined Utrecht in 2015 and led them to fifth and fourth place finishes in the top flight, taking the club into Europe. He was named the Eredivisie’s best manager.
Ajax came calling in December 2017 after the Amsterdam club had dismissed Marcel Keizer.
He steered Ajax to the 2019 Champions League semi-final, beating Juventus and Real Madrid en route, but losing out to Tottenham.
The football ball has won two league titles in the Netherlands.
Players have improved under his coaching methods, something that has been sorely lacking at United in recent years.
Ten Hag has been on a relentless upward coaching curve over the past two decades and has become one of the most respected coaches in Europe.