His appointment follows the departure of Briton Anthony Hudson in November after New Zealand lost an intercontinental playoff with Peru for a berth at this year’s tournament in Russia.
“Fritz has a proven track record at the highest level of coaching in Europe and we believe he will take our national team to a new level,” NZF technical director Andreas Heraf said.
“He has the experience and the vision to help the All Whites achieve the goal of winning on the world stage at pinnacle events.”
Schmid’s previous experience has been primarily as an assistant coach, including with the Austrian national team from 2011-13 and FC Basel from 2002-09, when they won the Swiss championship four times.
He also worked as an assistant to compatriot Christian Gross at Tottenham Hotspur in the English top flight in 1997-98.
The 58-year-old’s most recent position was technical director with the Malaysian Football Association.
“The All Whites are an exciting team and have huge potential,” he said.
“Our ultimate goal over the next four years is to qualify for the FIFA World Cup in 2022 and I am confident we can achieve this.”
New Zealand, ranked 121 in the world, face a tough route qualifying through the Oceania federation, which does not have an automatic World Cup berth.
Instead, if they top Oceania qualifications they still face an intercontinental playoff against a team from another federation to reach the tournament.