Jordan was offered the job on Friday and made the decision later that night to coach the Eastern Conference playoff team. He becomes the 22nd coach in franchise history and third since the start of last season.
Jordan, fired by the Washington Wizards in November, was one of two candidates that interviewed twice with Sixers president Ed Stefanski.
The Wizards owe Jordan nearly $4 million next season and would have to pay the difference on the contract from Jordan's new team. The length of the contract and Jordan's salary were not immediately known.
Jordan is 230-288 in coaching stints with the Wizards and the Sacramento Kings.
Jordan played at Rutgers and has ties with Stefanski from their four seasons together with the New Jersey Nets. Jordan was an assistant when the Nets played in two straight NBA finals and Stefanski served in various positions in the organization including general manager.
"I saw firsthand the immense impact Eddie Jordan had in helping the Nets reach two NBA finals and as the head coach in Washington, he consistently put his teams in a position to win on a nightly basis," Stefanski said in a statement. "He embodies all the qualities I was looking for in the next head coach of the Sixers and we are very excited to have him in Philadelphia."
Jordan did not immediately respond to phone and text messages.
"We had had some tremendous success together," Jordan said before his first interview with the Sixers. "There's a lot of positives in that, a lot of hard work in that."
Sixers assistant coach Jim Lynam was waiting for the news to become official.
"If it comes to pass, obviously I'd be happy for him," Lynam said by phone. "Eddie Jordan's a friend."
Mike O'Koren, one of Jordan's friends and former assistants, said Jordan was a perfect fit for an emerging team like the Sixers. O'Koren, who was fired along with Jordan when the Wizards got off to a 1-10 start, will likely join Jordan on the Sixers bench.
"I got a text from him saying things were moving in the right direction," O'Koren said on Friday night. "I thought it would happen when he did communicate with me. If he gets a job, I know I have a job. He's a good teacher."
Philadelphia went 41-41 and was eliminated in six games by the Orlando Magic. The job has been open since Tony DiLeo stepped down on May 11 and returned to the front office. DiLeo took over when Maurice Cheeks was fired in December.