The Sky Blues announced on Monday that the 49-year-old Englishman - a former youth-team boss at the club - will take over the first-team reins from Vitezslav Lavicka, who departed at the end of the A-League season.
"Sydney FC is pleased to announce Ian Crook as the Sydney FC head coach for the next two seasons," chairman Scott Barlow said on the club's website.
"His passion for Sydney FC runs deep, he has an impressive coaching and football knowledge and he is familiar with the club and what we are trying to achieve.
Crook served as inaugural coach Pierre Littbarski's assistant when Sydney claimed the first of their two A-League championships in 2005/06.
He said: "I'm thrilled and honoured to be named as head coach of Sydney FC.
"This club is very special to me after being part of its birth and early success and since returning to Australia I have enjoyed working with the younger players.
"Over the last few months the competitive urge has been re-ignited inside me and, after spending the last two seasons nurturing and developing young players, the time is right for me to step back into a head coach role."