Sarkisian, 39, took over Washington in 2009 and led the Huskies to a 34-29 record and 24-21 in the Pac-12 over five seasons, ESPN reports.
"I am extremely excited to be coming home to USC and for the opportunity that USC presents to win championships," Sarkisian said. "I can't wait to get started."
A source told ESPN that Sarkisian, a Torrance native, interviewed with USC over the weekend.
Sarkisian was the assistant head coach and offensive coordinator for USC football under Pete Carroll in 2007 and 2008, working with Heisman Trophy winners Carson Palmer and Matt Leinart. He was also an assistant at USC for seven seasons, from 2001 to 2003 and 2005 to 2008.
"We are delighted to welcome Steve Sarkisian back to the Trojan family," said USC athletic director Pat Haden in a statement. "We conducted a very exhaustive and thorough search, pinpointing about 20 candidates and interviewing five of them. We kept coming back to Sark. He is the only one who was offered the job. I believe in my gut that he is the right coach for USC at this time."
The move comes two months after USC athletic director Pat Haden fired Lane Kiffin following USC's 62-41 defeat at Arizona State. It was the most points scored against USC in school history. Kiffin's overall record in four seasons with the Trojans was 28-15.
Ed Orgeron had been serving as the interim head football coach. While USC made it known to Orgeron that it would like him to stay on in some capacity, he said he is leaving to pursue head coaching opportunities.
"I am grateful to the University of Southern California for the great time I had here," Orgeron said in a statement. "I'm especially grateful for the players on this year's team, the coaching staff and the Trojan family for the way they all fought through adversity and became one."