The side are looking for promotion back to the Scottish Premiership, but have not had the best start to the season as they find themselves fourth in the league.
Nielsen, who had a brief spell at the club as a players in 2011, has previously managed Hearts and MK Dons, and is looking forward to the challenge of gaining promotion.
"It is an exciting opportunity at a great club and I am confident that I can lead Dundee United back to the Premiership" the former Scottish international tod the club's website.
"This is the perfect challenge for me at a club I know well and I am looking forward to meeting the coaching staff and players tomorrow and getting straight to work ahead of Saturday's match at Partick Thistle."
October 8, 2018