Zahoui has signed a two-year contract, Ivorian Football Federation general secretary Hego Ouattara said in a statement.
The former Ivorian international was caretaker coach for the Ivorians' 1-0 win over former world champions Italy in London earlier this month.
The Ivorian federation decided after the win to give Zahoui the job on a permanent basis with its president Jacques Anouma saying although they were originally searching for a high profile foreign name to coach the side, there was nothing standing in the way of a competent local taking the job.
Earlier this month, they offered the post to French coach Gerard Gili, who looked poised to accept after travelling to Abidjan but then turned it down.
Zahoui, 48, has limited coaching experience. He has coached the Ivorians' under-20 national side and was briefly at Abidjan club Africa Sports, as well as Toulon in France. His last job was as technical director at French amateur club FC Seynois.
The Ivorians host Rwanda on September 5 in the first of their Group H qualifiers for the 2012 African Nations Cup, which is being co-hosted by Equatorial Guinea and Gabon.
Zahoui played as a teenager for Ascoli in Italy's Serie A in 1981 but he made just 11 appearances before moving on to Nancy in France.
Eriksson was the short-term coach for the Ivory Coast at this year's World Cup in South Africa where they were eliminated at the group stage, despite drawing with Portugal and beating North Korea.
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