Xavi was a member of the Spain team that beat the Dutch in the World Cup final in 2010, marking their third defeat in the global championship match.
The 46-year-old, who hasn't been in the game since leaving his job as Barcelona coach in May 2024, takes over from Ronald Koeman after his departure following the World Cup.
Xavi, lynchpin of the Barcelona side that featured Lionel Messi and Andres Iniesta among its many riches, said he felt a "special connection to Dutch football" after coming through the Barca academy that was so heavily influenced by Dutch coaching masters Johan Cruyff and Rinus Michels.
"You could say that I am a bit of a son of Dutch football," said Xavi, who has signed a deal through to the 2030 World Cup.
"Other great coaches, especially Louis van Gaal, under whom I made my debut at Barcelona, and Frank Rijkaard, also played an important role in shaping me as a player and coach."
The last foreign-born coach of the Netherlands was Austrian Ernst Happel, back in 1977-78.
Xavi said the Dutch soccer culture — "attacking football, based on possession, with creativity, passion, and conviction" — appealed to him.
"Of course, the most important goal is and always will be to win, but I prefer to do so in a way that reflects those characteristics and that people can enjoy," he said.
"The potential for this is there, as well as a solid foundation to build upon."
Nigel de Jong, director of elite football at the Dutch federation and an opponent of Xavi in the 2010 World Cup final, said the Spaniard's vision of "dominant and attractive football, combined with the flexibility that modern elite football demands" would serve the team well.
After playing for 17 years at Barcelona, Xavi finished his career at Al Sadd before becoming the Qatari team's coach from 2019-21.
The Netherlands exited the World Cup in the round-of-32 after losing to Morocco in a penalty shootout.
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