The 50-year-old has accepted the job on an initial short-term basis in an effort to support Sweden’s faltering 2026 World Cup qualification.
In a statement released by the Swedish Football Association, Potter said: “I am very humbled by the assignment, but also incredibly inspired.
“Sweden has fantastic players who deliver in the world's best leagues during the weeks. My job will be to create the conditions so that we as a team deliver at the highest level to take Sweden to the World Cup next summer.”
This comes just a month after Potter was sacked from West Ham, following a stint of poor results for the London club.
Under his tutelage, the Hammers lost five of their first six games this season, landing the team in the relegation zone.
Meanwhile, Sweden had let go of previous manager Jon Dahl Tomasson after losing 1-0 to Kosovo on October 13 - making automatic qualification for next year’s World Cup impossible.
As a result of their defeat, Sweden are at the bottom of Group B, having drawn with Slovenia,
lost twice against Kosovo, and once against Switzerland.
Potter - who previously managed Swedish team Ostersunds from 2011 to 2018 - said he was open to heading up Sweden, though didn’t feel he needed the job as he is in a “very good position financially”.
He told Swedish outlet Fotbolskanalen, he said: “I’m open to anything where I feel I can help.
“The job as [manager] for the Swedish national team is fantastic. I have feelings for Sweden. I love the country and I love Swedish football.
“I have a lot to be grateful towards Swedish football.”
He continued: “I’m in a very good position financially. It’s gotten to the point where I don’t have to consider finances as a reason to take a job or not.”
During his time at Ostersunds, Potter took the team from the fourth to the first division, and the last 32 of the Europa League.