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He replaces Julen Lopetegui, sacked before the 2018 FIFA world cup following his decision to take over the Real Madrid job despite him having a contract with the national team.
Luis Enrique has been on a sabbatical since leaving Barcelona in May 2017 and was linked to Paris Saint-Germain and Chelsea last April.
Spain's football board unanimously approved Luis Enrique's appointment just eight days after the national team, under caretaker manager Fernando Hierro, were eliminated on penalties by hosts Russia in the second round of the World Cup.
Enrique who will be unveiled next week, will be in charge of the national team for the next two years.
The 48-year-old guided Barcelona FC to nine titles in his three campaigns in charge of the first team, including a treble-winning in his first season. He previously handled A S Roma, Celta Vigo and Barca's reserves.
Luis Enrique also enjoyed a successful playing career, for both Real Madrid and Barcelona.
He scored 12 goals in 62 appearances for Spain, was a member of the squad that won gold at the 1992 Olympics and represented the national team at three World Cups as well as Euro 1996.
In Russia, La Roja topped their group after a win against Iran and draws against Portugal and Morocco. They lost 4-3 on penalties following a 1-1 draw with Russia in the second round. Spain had suffered a first-round exit four years earlier in Brazil and lost to Italy in the round of 16 of Euro 2016.
Luis Enrique's first game in charge will be a UEFA Nations League's encounter against England on Sept. 8.
Also appointed is a former Atletico Madrid goalkeeper Jose Francisco Molina as new sporting director, replacing Fernando Hierro, who just resigned.
