The 55-year-old former Tottenham boss has agreed an initial two-year contract with the option of a further 12 months and replaces Mark Hughes, who resigned last Thursday after just one season at the helm.
Jol saw his hopes of taking charge of Fulham following Roy Hodgson's departure a year ago blocked by Ajax. "I am very happy to be back and especially at a club like Fulham," Jol told the club's official website, www.fulhamfc.com.
"I remember coming here with Tottenham and I even think I played here when I was a player. Craven Cottage is a real football stadium, I loved going to Fulham. I could have gone to other countries, but I was waiting for the opportunity to come back to England."
Jol will already have an idea about some of the players he has inherited, but also revealed he had started looking at bringing players in in what will be a shortened summer break ahead of the Europa League qualifiers.
"There are a few players here I still know from my time at Tottenham, like Simon Davies, Danny Murphy and Stephen Kelly - they are all very good professionals," the former West Brom and Coventry midfielder added.
"I enjoy watching Fulham and I enjoy watching players like Moussa Dembele, who I have known for a while. We had a good conversation about players and where we can try to strengthen and get one or two quality players."
Fulham had been linked with a £10m move for Espanyol striker Pablo Daniel Osvaldo, and chairman Mohamed Al Fayed would appear ready to back his new manager.
"I would like to welcome Martin Jol to Fulham. He understands my vision for the club, and believes in what we are striving to achieve here," Al Fayed said. "I know that he will dedicate himself to helping us move forward, and is with us for the long term, to help us build and progress.
"We have enjoyed three incredibly successful years, and my hopes and dreams for this club are for that journey to continue. I know that with his wealth of experience and success, Martin is the right man to help us do this."