Northern Ireland name O'Neill manager
The former Northern Ireland international midfielder will take up the role on February 1 for an initial two-year period with the aim of guiding the Irish into the World Cup finals in 2014 for the first time since 1986.
In his three years as manager of Shamrock Rovers he led them to two League of Ireland titles and they became the first team from Ireland to reach the group stages of either of the two UEFA club competitions.
O'Neill, 42, whose playing career included spells at Newcastle United, Dundee United and Hibernian, told the Irish FA website:
"I am a proud Northern Irishman who was fortunate enough to win 33 senior caps and it was always an ambition to manage my country.
"Northern Ireland has a strong football tradition but one that needs to be refreshed with some more contemporary success.
"My job is to work with the players to sustain a competitive performance throughout the qualifying phase of the 2014 World Cup Finals."
Northern Ireland will face Portugal, Russia, Israel, Azerbaijan and Luxembourg in their qualifying campaign.