The Austrian was fired last July in a shake-up by the new leaders of the Indonesia FA (PSSI) but he has been given his job back by Indonesia Soccer Rescue Committee (KPSI).
The breakaway KPSI says it runs Indonesian football over the PSSI as the sport has imploded with its failure to solve a bitter row over a breakaway league.
"[Riedl] has agreed to coach our national team and we have given him a target to win the AFF Suzuki Cup in December," the FA's KPSI-elected chairman La Nyalla Mattalitti told the Jakarta Globe.
"He will start working immediately to select all best players in the country, from the ISL [Indonesian Super League] and IPL [Indonesian Premier League]."
Riedl's sacking triggered a furious response from Indonesia fans after the Austrian led them to the 2010 AFF Cup final, before the PSSI initially refused to pay out his contract.
The PSSI has until June 15 to get its house in order or suffer FIFA sanctions as a row over the breakaway rebel league rages on amid government threats to take over.
Riedl, 62, has had spells in charge of Vietnam, Laos, Palestine, Liechtenstein and his native Austria in a lengthy coaching career.
