Flanagan left Tuesday's meeting with the unanimous support of the Dragons board, with only the length of the tenure, salary and other specifics left to be ironed out.
By Wednesday evening, the details had been agreed upon and the Dragons confirmed Flanagan would see out the year as an assistant coach at Manly before joining in the 2024 pre-season.
As Anthony Griffin's permanent successor, Flanagan is charged with inspiring the Saints back to the finals after what is likely to be a fifth consecutive season finishing outside the top eight.
The Dragons will be hoping Flanagan's winning experience and previous stint on their staff can help convince current players to stay put and others to sign on despite the lack of recent success.
"There is a fantastic opportunity at the Dragons to build something really special over the next few years," Flanagan said.
"While the Sea Eagles will continue to have my full focus for the rest of this season, I also can't wait to get started back at the Dragons at the end of this season and work on returning the club to the finals where it belongs."
After highly rated assistant coach Jason Ryles knocked the Red V back, Flanagan beat ex-Dragons players Dean Young and Ben Hornby in the race to replace Griffin, who was sacked last month after a six-game losing streak.
Flanagan was the only candidate of the three with head-coaching experience, having finished his 185-game tenure at the Sharks with a 55 per cent winning record and the drought-breaking 2016 premiership.
The position is Flanagan's first since his ban from NRL head coaching ended in November 2021 - the NRL deregistered him in late 2018 after it came to light he remained in contact with Cronulla while serving a suspension for his role in the club's supplements scandal.
Since then Flanagan has worked as an assistant and list management consultant at the Dragons, positions he held before joining Manly as an assistant this year.
"We have full faith in Shane's abilities as a coach and are looking forward to welcoming him back to the club," said Dragons chairman Andrew Lancaster.
"Shane will add value in the role of head coach given the club's deep, talented and emerging playing roster.
"Shane is well regarded within the club from his recent roles here, first as an assistant coach then as list management consultant.Â
"The time he previously spent with the club also gives him a high level of familiarity with our players, systems and pathways."
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