Kidney was Munster's director of rugby at the time and his appointment was delayed until after that summer's tour of New Zealand and Australia, with the Irish province chasing another Heineken Cup triumph.
Kidney replaced Eddie O'Sullivan, who resigned following Ireland's dismal World Cup and then worst ever Six Nations campaign.
Irish Rugby Football Union chief executive Philip Browne said: "While the need to make the appointment as soon as was practicable was important, the IRFU was conscious of keeping any disruption to the preparations of the Munster team to a minimum.
"Declan Kidney's record speaks for itself and it was obvious from the very beginning of this process that he was one of the main contenders to lead Ireland to the next Rugby World Cup in 2011."
Kidney's appointment was an open secret, and his CV gained another notable entry when Munster did win a second Heineken Cup title in three years.
Kidney, who had previously been assistant to O'Sullivan, said: "There is no greater honour for any coach than to lead his own country. I am delighted to have this opportunity and to be here at what is the pinnacle of my career.
"I have worked with many exceptional players during my career at both international and provincial level and there is no doubt that we have the talent in Ireland to be successful at the highest level."
Kidney's tenure got off to the perfect start as he led Ireland to the Six Nations Grand Slam in 2009. They then beat Australia at the 2011 Rugby World Cup before losing in the quarter-finals to Wales.
In 2012, Ireland suffered a record 60-0 loss to New Zealand, and Kidney's contract was terminated in 2013 after they finished fifth in the Six Nations, including a loss to Italy.
He is currently director of rugby at London Irish.