The 43-year-old Kreis won the 2009 MLS Cup with Real Salt Lake, whom he guided to the post-season in every year from 2008 to 2013, as well as securing a CONCACAF Champions League final appearance in 2011.
Kreis - MLS' sixth all-time leading goalscorer - was last in charge of New York City in its inaugural season in 2015 but he was sacked after missing out on the play-offs.
"We are very excited that we have got our man. Jason is a progressive thinking and highly ambitious coach, who is very familiar with success in MLS," said president Phil Rawlins.
"Jason's playing philosophy is the same attack-minded, possession-oriented style of soccer that we have built our club around. He is a winner who checks all the boxes for us."
Kreis and his staff - Miles Joseph and CJ Brown - will commence work on Monday.
Rawlins said: "I want to place on record how much the club thanks Bobby Murphy and Anthony Pulis for stepping into head coaching roles over the past two weeks. They have done a great job for us and will be in charge of team affairs again at Columbus on Saturday night."
Orlando City has played 19 matches in MLS this year, winning four and drawing 10 to sit just a point outside the play-offs in the east.