The League Two club confirmed late on Tuesday that the former England coach had joined with immediate effect along with his former England assistant Tord Grip who takes on the role of general adviser.
"Sven shares our vision, and to attract someone of his calibre is testament to the ambition that we all share for Notts County," chairman Peter Trembling said in a statement on the club's website. "This a great day for everyone associated with the club."
County said Eriksson's salary would be performance-based.
"Sven's remuneration will largely be determined by the success of Notts County FC on the pitch and he will also be participating as a shareholder in the club," the club said.
The appointment of Eriksson underlines the ambition of County's new owners, the Middle East group Munto Finance.
ENGLAND'S BASEMENT
However, for one of the games's most successful coaches to return at a club that spent last season languishing in the lower regions of England's basement, is still a huge surprise.
Before beginning a five-year reign as England's first foreign national coach, Eriksson coached Roma and Sampdoria and won the Scudetto with Lazio in 2000.
"I am particularly attracted to this role and the unique opportunity to help build a club over the longer-term," Eriksson said in a statement.
"I started my football management career at a small lower division Swedish club and we managed to get them into the top-flight.
"I can think of no better challenge than to attempt to do that again, but this time with the world's oldest football club, where we can add to a proud tradition and hopefully bring some richly deserved success. We hope to leave a long lasting football legacy for Notts County FC and its fans."
