Queiroz, who replaces Brazilian Luiz Felipe Scolari, will sign a four-year contract.
"I am very proud and honored to be able to go back and serve my country," the FPF quoted Queiroz as saying on its website. "This is a very special position that any professional would want. The first big objective is to qualify for the World Cup in South Africa."
Queiroz's first spell in charge ended when the country failed to qualify for the 1994 World Cup finals. He had made a name for himself, leading Portugal to U-20 World Cup titles in 1989 and 1991 with teams that produced the "Golden Generation" of Portuguese stars.
Queiroz coached the MetroStars for the latter part of the 1996 season and then headed to Japan to coach Nagoya Grampus Eight.
Following the U.S. debacle at the 1998 World Cup, Queiroz was considered the leading candidate to replace Steve Sampson as U.S. national team coach -- he was the author of the controversial "Queiroz Report" examining the technical side of the U.S. game -- but no agreement was reached and he headed to the United Arab Emirates.
After a stint in South Africa, Queiroz headed to Man. United for the first of two spells as Sir Alex Ferguson's top assistant. (Queiroz spent a season as head coach at Real Madrid in 2003-04.)
Queiroz's continental approach is considered an important factor in United's success in recent years. United has loaded up on players from Portugal, notably Ronaldo Cristiano.
Queiroz's departure comes as Cristiano Ronaldo is reportedly set to -- or at least desirous of leaving -- United for Real Madrid.
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