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."
Swede Eriksson, 61, will be responsible for all aspects of developing the club on the pitch including training facilities, youth development and transfer negotiations, County said, confirming that a news conference is planned for Wednesday.
Eriksson commanded a huge salary during his reign as England manager between 2001 and 2006, the highlight of which was reaching the quarter-finals of two World Cups and one European Championship.
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."
Notts County, formed in 1862 and founder members of the League in 1888, have not been in the top flight of English football since 1992. They finished a lowly 19th in League Two last season.
Despite their long history, the Meadow Lane club have lived in the shadow of more illustrious city neighbours Nottingham Forest, the former European Cup winners. Their one major honour was winning the FA Cup in 1894.
Eriksson retuns to English club football after a season-long stint with Manchester City that began brightly but ended in 2008 with an 8-1 defeat against Middlesbrough.
Following his departure from City, Eriksson was named as Mexico coach but was sacked in April after a 3-1 defeat by Honduras in a World Cup qualifier.
