The 49-year-old Norwegian manager was sacked this week by UAE side Al Wahda after coaching in Belgium with Standard Liège and Club Brugge.
He joins Atlanta United's newly appointed sporting director, Chris Henderson, in trying to spark the club back to its MLS championship form of 2018.
"We're thrilled to welcome Ronny as the new head coach of Atlanta United," club president Garth Lagerwey said.
"He has a proven track record of winning in multiple leagues around the world, including the 2021 MLS Cup with NYCFC, and his knowledge of MLS was a key factor in our search.
"We believe his style of play aligns with the club's philosophy as we look to build a team that will compete for trophies consistently."
Deila went 46-29 with 15 drawn in all competitions with NYCFC from 2020 to June 2022 when he took charge of Brugge. Deila also won Scottish crowns with Celtic in 2015 and 2016.
"Couldn't be more excited to join Atlanta United," Deila said.
"This is a club with great ownership, excellent facilities and the ambition to succeed and continue to drive the league forward.
"I'm happy to return to MLS, a competitive league that I enjoy, and I'm eager to arrive and get to work with our group of players."
Atlanta fired Gonzalo Pineda as coach last June and interim manager Rob Valentino guided the club to an upset of Supporters' Shield winners Inter Miami in the MLS playoffs before falling to Orlando City in an MLS Eastern Conference semi-final.
