"This basketball program is rooted with such great tradition and it has a history built by legendary coaches, so this is a humbling experience," Anderson said in a statement. "I look forward to mentoring the young men who will represent St. John's proudly on the court, in the classroom, and in our community."
The Red Storm have been searching for a new head coach since Chris Mullin stepped down April 9.
Anderson spent the last eight seasons in charge of the Razorbacks. He finished with a 169-102 managerial record and led them to three NCAA Tournament berths but was dismissed by Arkansas in March following an 18-16 season.
"Coach Anderson is one of the most respected coaches in college basketball and there is no doubt in my mind that he is the perfect fit to lead our program," said athletic director Mike Cragg.
"He has built programs and has sustained success throughout his career. We are confident that his extensive coaching experience, recruiting acumen, and skill development program will elevate St. John's basketball to new heights."
St. John's also interviewed Yale head coach James Jones and Los Angeles Clippers scout Paul Hewitt for the coaching vacancy Thursday, sources told Roger Rubin and Steven Marcus of Newsday.
The Red Storm reportedly offered Loyola-Chicago head coach Porter Moser an eight-year deal but he rejected it to remain with the Ramblers.