O'Sullivan led Ireland to three Triple Crowns and enjoyed a win/loss ratio of 50-28 during his seven years in charge of his country but resigned after an early exit from the 2007 World Cup was followed by a disappointing 2008 Six Nations campaign.
The ex-Ireland A utility back has plenty of American experience as he became the Eagles forwards coach in 1997 and USA Rugby's assistant national technical director, before taking up the role of overall director in 1998. He was also with the Eagles as assistant coach in their 1999 World Cup campaign and is now looking forward to returning to the States once more.
"I am delighted to accept the invitation to coach the U.S. Eagles," said O'Sullivan.
"It is an exciting challenge, which comes at a crucial period when I share their ambitions to qualify for Rugby World Cup 2011.
"In re-joining USA Rugby I am going back to my coaching roots as it were and while I am delighted that much progress has been made since my last involvement, I am driven now by a determination that I share with the Eagles to demonstrate that USA Rugby has the resolve to establish its identity amongst the leading Nations in the game."
Former Gloucester coach and England international Nigel Melville, who is now CEO and president of operations at USA Rugby, has welcomed O'Sullivan's appointment, believing the country is ready to push on to greater things.
"We are obviously delighted to announce Eddie as the new Eagles coach," said Melville.
"He is knowledgeable about the American game and has an outstanding track record as an international coach.
"Eddie has worked with the world's top players and will bring enormous enthusiasm to the role."