'Obviously, I'm extremely delighted to be asked to be captain once again and I'm looking forward to the opportunity to carry out my role without crutches, and hopefully in good health this time,' said Nilsmark, who was hampered by a serious back injury throughout last year's matches.
Annika Sorenstam led Europe to a seven-point victory over the United States at Barseback Golf and Country Club in Sweden last year in the biggest rout in Solheim Cup history.
Nilsmark, who played in five Solheim Cups, holed the winning putt for Europe in the 1992 matches.
The Solheim Cup will be played at Crooked Stick Golf Club in Indiana, site of John Daly's 1991 PGA Championship victory, in September 2005.
Hall of Famer Nancy Lopez will captain the U.S. team, which has never lost at home.
Also Monday, the Ladies European Tour announced the Solheim Cup will return to Sweden in 2007. The venue for the matches will be announced in the summer.
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