Domanski Lyfors signed the reported €400,000 ($533,000) contract on Monday. Domanski Lyfors replaces current coach Ma Lianxing, who has stepped down due to heart trouble.
The Swede is expected to arrive in China at the beginning of April, according to Shanghai Daily. She will then have five months to prepare her team for the World Cup, which kicks off in Shanghai in the autumn.
Domanski Lyfors coached the Swedish team for nine years, taking them to the final of the World Cup in the United States in 2003.