The 45-year-old Australian, who was a hooker with the club in the days before Super League and then held the posts of head coach and chief executive, will be in charge for the last seven games of the season as the Londoners search for a successor to Rob Powell.
Powell became the second Super League coaching casualty of the week when he was removed from his role as head coach of the Broncos, just 24 hours after fellow strugglers Huddersfield sacked Nathan Brown.
Powell, who at 31 was the youngest head coach in Super League, was placed on "gardening leave" ahead of the return of Rea, who returned to Australia at the end of the 2007 season to join Canberra-based rugby union side Brumbies.
With Powell's assistant Latham Tawhai having left the club earlier this month for personal reasons, Rea will have only Under-20s coach Michael Howell to help him prepare for Saturday's top-versus-bottom clash with Wigan at the Twickenham Stoop.
Powell, who has been offered the chance to remain with the club, has paid the price for a disastrous season for the Londoners, who are favourites to pick up the wooden spoon after just three wins so far this season.
London chairman David Hughes said: "We had to make changes because our performances were unacceptable.
"This is a result of our mid-season internal review with other findings due to be concluded soon. We are advertising for a new head coach, both in the UK and worldwide, with a view to him being in place for pre-season on November 1st."
Hughes clearly lost patience with the current regime after watching his decision to spend up to the salary cap with the capture of high-profile signings like Craig Gower and NRL grand-finalists Shane Rodney and Michael Robertson backfire badly.
Rea, who is expected to arrive from Australia on Thursday, described the call from his old club as "a bolt out of the blue".