The 38-year-old former Heart of Midlothian and MK Dons boss has signed a contract until 2020 and will take charge for the first time against Partick Thistle at Firhill on Saturday.
Neilson, who was at Tannadice as a player in 2011/12, told the club website: "It is an exciting opportunity at a great club and I am confident that I can lead Dundee United back to the Premiership. This is the perfect challenge for me at a club I know well."
