Nielson will succeed Joe Glenn, who retired after four seasons at South Dakota.
The 56-year-old Neilson has compiled a 186-80-1 record in 23 seasons as a head coach. He's been at Western Illinois the last three seasons. Before that he coached Ripon College, Wartburg College, Wisconsin-Eau Claire and Minnesota Duluth. He led Duluth to NCAA Division II national championships in 2008 and 2010, and he was voted Division II coach of the year following both seasons.
Nielson this season led Western Illinois to the Football Championship Subdivision playoffs.