Eriksson will replace Clarence Seedorf, who took over at Shenzhen in July but failed to win promotion to the Chinese Super League.
The Swede will replace former Dutch international Clarence Seedorf, who took over at Shenzhen in July but failed to win promotion to the Chinese Super League (CSL).
Shenzhen FC, based in the Guangdong southern province city which neighbours Hong Kong, announced the coaching change Monday on an official social media feed, saying it expected Eriksson's "rich coaching experience, advanced football philosophy, and intimate knowledge of Chinese football" to lead the team to a new era of success.
Eriksson left Shanghai SIPG, one of China's biggest clubs, last month after two seasons in charge.
SIPG were CSL runners-up in Eriksson's first year at the club and reached the last eight of the 2016 AFC Champions League but crashed out to the eventual champions from South Korea Jeonbuk Hyundai Motors, embarrassingly losing the second leg 5-0.
Eriksson coached England from 2001-2006 and went on to lead Manchester City and Leicester City.
Shenzhen FC thanked Seedorf for his contributions but gave no reason for his departure. The team were relegated to China's second tier in 2011.
As a player, Seedorf won domestic and continental titles in his native Netherlands, Spain, Italy and Brazil but his managerial career has been less distinguished and he was dismissed by Milan in 2014 after just four months in the job.
The CSL has a reputation for abrupt managerial turnaround.
SIPG said in November Eriksson was leaving following "friendly discussions" and it quickly replaced him with former Chelsea and Tottenham Hotspur manager Andre Villas-Boas.
Shanghai Shenhua last week named former Uruguay international Gustavo Poyet as their new coach after cutting ties with his Spanish predecessor Gregorio Manzano despite a fourth-place CSL finish that earned them an AFC Champions League spot.