The current head coach of Atlanta United 2 in the USL returns to Pittodrie having started his playing career with the club in 1994.
Glass had been the frontrunner to replace Derek McInnes, who departed the Dons earlier this month after eight years in charge following a run of disappointing results.
The 49-year-old is currently in America with Aberdeen planning to officially unveil their new boss when he arrives in Scotland.
It has been reported that Glass is keen to bring his former Hibs team mate, and current Celtic captain Scott Brown to Pittodrie as his assistant.
Glass described his appointment as a “real honour” adding: “Since my retirement from playing, I have been focused on becoming the best coach I can be with the aim of being in a position to secure an opportunity such as this.
“Having worked with a number of esteemed managers and coaches in the game, my football education has been extensive and my time with Atlanta United 2 has afforded me the chance to develop some exciting young players and hone my coaching skills.
“From the initial conversations I have had with the chairman and the board this week I am hugely excited about the plans that are being put in place for next season. Dons’ fans can be assured by my drive for Aberdeen to compete fiercely and to win.”
Glass took interim charge of the Atlanta United MLS side last year following the departure of Frank de Boer. He moved back to coaching the second string in the USL following the appointment of Gabriel Heinze.
Aberdeen chairman Dave Cormack, who has ties to the Atlanta franchise, explained the reasons for turning to the former Scotland international.
"During our recruitment process our football strategy, philosophy and the key attributes we desire in a new manager led us to short-listing and interviewing a number of emerging highly talented, driven and ambitious coaches,” he said. “Stephen was the outstanding candidate for the role. He is a bright, young, emerging manager who has all the attributes we are looking for to take this club forward.
“His winning mentality, having been mentored in the ‘Aberdeen Way’ from an early age by the likes of Teddy Scott, Alex Smith and Willie Miller, and desire to embrace the Club’s strategy were key factors in our decision. He is committed to an exciting, attacking style of football and maximising our player budget so we can get the best out of, and right balance between, experienced players and, crucially, developing and playing young first team players.
“His coaching style and track-record of developing young players at Atlanta United, like George Bello from the academy to the first team, to now becoming a US international player, and working with top professionals like Argentinian international Pity Martinez, a South American player of the year, who Atlanta United then sold for around $20 million, along with his leadership and communication skills are exactly what we need at this juncture for Aberdeen Football Club.”
Glass’ immediate task will be to try and address Aberdeen’s poor form, which has seen them win just one of their last 10 matches and fall seven points behind Hibs in the race for a third place finish in the Premiership.