The 45-year-old Sutter will be the Devils' 14th coach in 26 seasons in New Jersey, and he will try next season to become the first to finish a season since Pat Burns in 2003-04. Days after the season ended, cancer forced Burns to step down.
After the 2004-05 lockout season, Larry Robinson lasted half a season before resigning and being replaced by Devils president and general manager Lou Lamoriello.
Claude Julien got the job last summer and had the Devils in first place with three games left in the regular season when Lamoriello fired him because he didn't like the way the team was playing.
A two-time Stanley Cup winner with the New York Islanders in the 1980s and one of six brothers to play in the NHL, Sutter has never coached an NHL team. A strong disciplinarian, he has had success behind the bench.
"We are fortunate to have someone with Brent Sutter's character, knowledge, energy, enthusiasm and experience join our organization," Lamoriello said Friday. "He has been successful at every level and we look forward to him continuing that success in the National Hockey League."
Sutter coached the Red Deer Rebels - a team he owns - to the Memorial Cup in 2001. His stature as a top NHL coaching prospect was significantly enhanced when he guided Canada to world junior gold in 2005 and 2006.
Sutter resigned as coach and general manager of the Rebels on Thursday, but he retained ownership of the team he bought in 1999.
Lamoriello wooed Sutter after the 2005-06 season, but he opted to remain in Alberta.
The Devils won the Atlantic Division title this past season and were eliminated in the second round of the playoffs by the eventual Eastern Conference champion Ottawa Senators.
Sutter will take over a club that lost two of its top players to free agency in recent weeks. Centre Scott Gomez signed with the rival New York Rangers and three-time all-star defenceman Brian Rafalski signed with Detroit. Both players were members of the Devils' Stanley Cup championship teams in 2000 and 2003. New Jersey won its first Cup in 1995.
Sutter will also face the prospect of coaching his first nine games on the road next season. The Devils are moving into the new Prudential Center in the state's largest city after playing at the Continental Airlines Arena in East Rutherford, N.J., for the past 25 years.
The new building is in its final stages of construction and the Devils scheduled a long road trip to open the season to avoid a possible problem.