McLellan appeared at a news conference Thursday as the seventh head coach in Sharks team history.
He replaces Ron Wilson, who helped the team to a 49-23-10 regular-season record. Wilson was fired after San Jose was beaten in the second round of the playoffs. Wilson was introduced as the coach of the Toronto Maple Leafs on Tuesday.
McLellan was an assistant to Red Wings Coach Mike Babcock for three seasons. He was previously the head coach of the House Aeros of the American Hockey League, building a 154-111-37 record. Houston won the AHL's Calder Cup under McLellan in 2003.
"It's a very good feeling," said McLellan in a statement. "From the first moment (he was offered the job), I felt comfortable.
"I think the Sharks have done a tremendous job. You don't get that close to 50 wins for a number of years in a row without a lot of talent. It's a matter of getting over the hump."