Vanska, 61, will lead at least 10 weeks of concerts for each of the next two seasons, the board said.
In a statement, Vanska said he looks forward to "getting back to music-making with the players and together re-establishing our worldwide reputation for artistic excellence."
Board Chair Gordon Sprenger said Vanska led the orchestra to "great heights" during his decade as music director.
"We are delighted he is back," Sprenger said in the statement.
Vanska resigned in October during a lockout of musicians that lasted 16 months. The dispute ended in January, when musicians agreed to pay cuts in a new three-year contract.
After the lockout ended, Vanska said orchestra President and CEO Michael Henson would have to step down for the orchestra to heal. Henson resigned last month but will remain in his post until Aug. 31.
In a statement, the musicians said they are excited about Vanska's return.
"This is a major step in rebuilding the trust and collaborative spirit within our organization as well as with our community," the musicians said.
Vanska already has conducted the orchestra three times at Orchestra Hall in downtown Minneapolis since the lockout ended and had been negotiating with management for his return. The board approved his new contract Thursday and said he accepted the same pay cut as the musicians.
In January, the Minnesota Orchestra won its first Grammy for best orchestral performance, for "Sibelius: Symphonies Nos. 1 & 4" that were recorded with Vanska in 2012.
The orchestra was founded in 1903.