Reid, who has been out of work since leaving Coventry in January 2005, agreed terms with Football Association of Thailand (FAT) president Worawi Makudi on a four-year deal.
"Our discussion went very well. We added some work for Reid apart from being in charge of the national team," Worawi told the Bangkok Post after thrashing out the details with Reid's agent Mike Morris.
As well as handling the national team, he will help create a national reserve side of Under 20 players. "This will be good for Reid because we want him to see players not only in Bangkok but also in the provinces," said Worawi, who could not immediately be reached for confirmation.
The former Everton star, who recently turned down a job with Iran, wants to bring ex-England defender Viv Anderson in as his assistant, but details have not yet been worked out. The newspaper said it was believed that the English FA, which recommended Reid to Worawi, would help shoulder part of Reid's salary.
His first assignments will be the King's Cup in Bangkok and the ASEAN Football Championship, to be co-hosted by Thailand and Indonesia later this year.
Reid succeeds Chanvit Phalajivin, who quit last month after Thailand were dumped out of the 2010 FIFA World Cup South Africa™ qualifying series.