"I'm very excited to be a Kansas City Chief," said Reid.
Reid brings a career record of 130-93-1 to Kansas City after 14 seasons with the Philadelphia Eagles.
"The fan base here is phenomenal. I came from a fan base that was tremendous," he said. "There's nothing like the sea of red."
He was also the 2002 AP Coach of the Year.
He replaces Romeo Crennel, who was relieved of his duties just after posting a 5-19 record as head coach in KC.
Reid is expected to revitalize the Chiefs offense that was last in points per game, and their quarterbacks were second to last in interceptions thrown.
"We're going to coach hard and make sure we build a foundation," added Reid.
Under Reid, the Eagles scoring offense finished eight seasons in the top 10.