Hiddink, 71, becomes the latest big name coach to move to China since the country's president, Xi Jinping, stated his desire for the nation to become a global football power.
The Dutchman joins fellow European Cup-winning coach Marcello Lippi on the payroll of the CFA, with the Italian World Cup winner currently preparing the senior team for the finals of the Asian Cup in the United Arab Emirates in January.
Top coaches such as Luiz Felipe Scolari, Fabio Capello, Manuel Pellegrini and Andre Villas Boas have also had stints with clubs in the Chinese Super League.
Hiddink's appointment was announced on the Chinese FA's official website.
It said he had been tasked with leading the country through to the 2020 Asian Under 23 Championship, which serves as the continent's final qualifiers for the Olympic Games.
Hiddink is no stranger to football in region, having led South Korea to the semi-finals of the 2002 World Cup before taking Australia to the last 16 for the first time four years later in Germany.
His most recent job saw him work as an interim head coach with English Premier League side Chelsea.
China have not appeared at the Olympic football finals since 2008 when Beijing hosted the Games and the team were given an automatic berth.
(Editing by Peter Rutherford)
