The Vietnam Football Federation said an agreement had been reached with the Frenchman.
He is to take charge of both the senior national team and the country’s under-23 side following the departure of South Korean Park Hang-seo.
“The selection for this position has been carefully conducted by the VFF with a very strict process,” the organisation said in a statement on their website.
“The VFF and Philippe Troussier have basically reached a consensus and agreement on the contents related to the job … as well as the goals and tasks in the coming period.”
Troussier, who previously led the country’s under-19 team, is expected to be officially unveiled at a ceremony in Hanoi before the end of the month.
Vietnam have qualified for the Asian Cup, which is due to be played in Qatar early next year.
They finished as runners-up in last month’s ASEAN Championship, losing to Thailand in the final of the South-East Asian event.
That game was Park’s last in charge after he announced he would not extend his contract after more than five years leading the national and under-23 teams.
Troussier has an impressive history in Asian football, having taken Japan to the Asian Cup title in 2000, a success that also resulted in him being named the continent’s coach of the year.
Two years later he steered Japan to the last 16 of the World Cup on home soil.
He has also worked in Qatar, where he was the national team coach, and in China as head coach of league sides Shenzhen Ruby and Hangzhou Greentown.
The 67-year-old initially came to prominence as a coach in Africa, where he coached Cote d’Ivoire, Nigeria and Burkina Faso before taking South Africa to the 1998 World Cup in France.
NAN