
Shao, 45, was selected after considering “the current situation of Chinese men’s football (and) the long-term construction and development of the national team”, the Chinese Football Association (CFA) said in a statement.
He has also coached China’s U19 and U20 sides and served as assistant manager for the men’s national team.
Shao was capped 41 times for China, according to state media, and played in two group stage games in the country’s only appearance at the World Cup in 2002.
He finished his career in the CSL with Beijing Guoan in 2015.
China sacked previous manager Branko Ivankovic in June after their failed World Cup bid.
They ultimately finished second-to-last in their Asian group, with seven defeats in 10 matches.
The Chinese team is ranked 93rd in the world by FIFA, continuing a downward slide that began several years ago.
The side has long been the target of ridicule by Chinese fans due to their poor results and the multiple corruption scandals plaguing the sport.