The 61-year-old was sacked from his job as coach of Mexico in April and has previously been linked with a return to the Premier League with Portsmouth.
Eriksson has agreed to a five-year deal and will bring in long-standing assistant Tord Grip and coach Hans Backe.
County chairman Peter Trembling said: “We’ve taken the first major step in building our team of experienced and committed people by appointing Sven and Tord.
“Sven and his team join us with an unrivalled football pedigree. Their knowledge of the game and contacts throughout the football world will significantly enhance Notts County’s prospects.
“Sven shares our vision, and to attract someone of his calibre is testament to the ambition that we all share for Notts County. This is a great day for everyone associated with the club.”
County’s owners, Middle East investors including Dubai billionaire Abdullah bin Saeed Al Thani, want to take the club to the Championship within five years.
