The South African has been contracted to take him through past the end of the 2015 World Cup.
Melbourne: Mickey Arthur was appointed as Australia head coach on Tuesday, a role that also involves the former South Africa and current West Australia coach acting as a national selector.
The South African coach has been contracted to take him through past the end of the next ICC World Cup, due to be staged in Australia and New Zealand in 2015.
Arthur was South Africa's coach from 2005 to 2010 and has been head coach with the Western Australian Cricket Association since 2010.
He came to coaching after a 15-year first-class playing career in South Africa that netted him 6,657 first-class runs including 13 centuries, as well as 3,774 runs in South Africa's domestic one-day competition.
Cricket Australia Chief Executive Officer James Sutherland said Arthur would take on the role in time for the first Test against New Zealand, due to start in Brisbane on December 1.
"The position is a new, elevated role responsible for day-to-day coaching of the Australia team, but also encompasses responsibility for the overall Australian cricket coaching strategy. The function was created as one of the key recommendations of the recent Australian Team Performance Review (ATPR)," he said in a Cricket Australia statement released on Monday.
"It is the last of the major new positions recommended, following the recent appointments of Pat Howard to the new role of General Manager, Team Performance and that of John Inverarity to the new full-time role of National Selector."
CA General Manager, Team Performance Pat Howard, to whom the head coach reports, said Arthur was the outstanding candidate found after a global search and assessment of a long list of eminent Australian and overseas candidates.
"Mickey impressed on a number of levels, including his proven ability to turn teams around and his deep knowledge of the Australian cricket scene and its current and prospective future international players across three formats," he said.
"I am honoured and privileged to have another chance to coach an international team, particularly a team of the ilk of Australia," said Arthur. "I think I bring a fresh, unblinkered eye to the role after plotting against Australia when coaching South Africa and having now worked within the Australian system with the Warriors."
Arthur, who has an Australian great-grandfather, said he and his family were planning to become permanent Australian residents and make Australia their home.
"Australia has an abundance of cricket talent and I am confident the talent is there to ensure Australia is successful."