Klinsmann, who took over one day after Bob Bradley was sacked, became the first foreign-born coach to lead the U.S. since Bora Milutinovic, who was in charge from 1991 to 1995.
"We are excited to have Juergen as the head coach," said U.S. Soccer president Sunil Gulati in a statement.
"He is a highly accomplished player and coach with the experience and knowledge to advance the program.
"Jurgen has had success in many different areas of the game and we look forward to the leadership he will provide on and off the field."
After Bradley was sacked on Thursday, Klinsmann was immediately installed as the front-runner to take over.
Despite having three years to run on his contract, Bradley was dismissed after his side underperformed as hosts of last month's CONCACAF Gold Cup, where they lost to Mexico in the final after earlier losing to Panama.
U.S. soccer officials have long courted Klinsmann, the former German striker having reportedly turned down the job in 2006 and 2010 when the federation would not give him the control he demanded.
The U.S. reached the quarter-finals of the 2002 World Cup but progress has stalled since then, with a group stage exit in 2006 and a last 16 elimination four years later, both at the hands of Ghana.
Klinsmann brings with him a rich resume as both a player and manager.
He helped Germany to World Cup victory as a player in 1990 and as coach guided them to the semi-finals in 2006 when they hosted the tournament.
As a player, Klinsmann was one of football's top strikers and enjoyed a 17-year career that included stints in four major European leagues and top clubs, including Inter Milan, Tottenham Hotspur and Bayern Munich.
He made 108 appearances for Germany and scored 47 goals.
"I am proud and honoured to be named the head coach of the U.S. men's national team," said Klinsmann. "I would like to thank the U.S. Soccer Federation for the opportunity and I'm excited about the challenge ahead.
"I am looking forward to bringing the team together for our upcoming match against Mexico and starting on the road toward qualifying for the 2014 World Cup."
Klinsmann's first match in charge will be a friendly against Mexico on August 10 in Philadelphia.
After the match against Mexico, the U.S. will play a pair of friendlies in September hosting Costa Rica on September 2 and away to Belgium on September 6.
