"I am very flattered by this offer, given that I don't have any bigger experience as a coach," the 38-year-old Larsson, capped 106 times by Sweden, told a news conference to announce his first job in club management.
Larsson has signed a one-year contract.
"I look forward to it (the job) and we'll see where I can take this," added Larsson, who ended his playing career with home club Helsingborg in October.
"I know this will be an incredibly tough challenge for me," said Larsson. "But if you don't dare, you don't win anything. It's an interesting club, they have an idea and thoughts about the future. They know what they want."
Larsson enjoyed club success with Feyenoord, Celtic, Barcelona and had a short stint at Manchester United on loan. He made his last appearance for Sweden in a 1-0 loss to Denmark on October 10 in a World Cup qualifier.
Larsson won a Champions League medal with Barcelona in 2006 and was part of the Swedish team that finished third at the 1994 World Cup in the United States. He also won the Golden Boot in 2001 as Europe's top club scorer.
"We realised quite quickly that there was one name that was number one, and that was 'Henke'," said Landskrona chairman Keneth Hakansson. "He's a new face and person with modern thinking and pedigree."
