Koirala has led the Himalayan country through some of its biggest upheavals, and been implicated in the feuding and claims of corruption that have frequently rocked public life.
Aged 84, and reportedly an unwilling candidate for the prime minister's job, Koirala has held a series of premierships scarred by a deadly Maoist insurgency, party disputes and a palace massacre.
One of three brothers to hold the top job, he was in charge at the time of the mountainous nation's most notorious upset when 10 members of the royal family, including the king and queen, were shot and killed during the crown prince's drunken rampage.
The position of Koirala - the leader of the kingdom's largest party, the Nepali Congress - was shaky at the time of the massacre and he had nearly resigned over a corruption investigation.
He subsequently handed his resignation to the man who took over the throne, King Gyanendra, after a row when the new monarch began taking control of the army and political parties.
Nepalese opposition activists
But as Gyanendra was this week forced to hand back to the politicians the total rule he snatched more than 14 months ago, Koirala again moved to Nepal's political centre stage for what is likely to be the last time.
Koirala was born in India where his father, a renowned Nepalese social worker and political figure, was in exile, state media said.
As well as fighting for democracy in Nepal, he was also involved with the Indian independence movement against British colonial rule.
He is the younger brother of B P Koirala, who fought the century-old system of hereditary premiers in Nepal and became Nepal's first elected premier in 1959-60.
He has served many jail terms during the struggle for restoration of democracy in Nepal, and lived for some time in exile in India.
G P Koirala is a former union leader and a skilled party organiser with wide support among activists outside the capital Kathmandu who helped propel him to his first premiership in 1991.
Pro-democracy activists shout
He called general elections for 1994 but lost, weakened by internal party squabbling. Four years later, he was back in charge and facing the early years of a Maoist insurgency.
He launched a large-scale police operation against the insurgents, for which he was criticised for civilian deaths, but proved unable to stop the rebellion or bring prosperity to the nation during a period of repeated political crises.
In order to keep the party together, he stepped aside in 1999 and the Congress won an election victory.
However, he again took control the following year, saying his successor had done too little to improve security during the Maoist onslaught, only to quit after the palace massacre in 2001.
When Gyanendra dissolved parliament in 2002, the Nepali Congress had 113 of the 205 seats in parliament. Clashes between Koirala and his successor subsequently led to a split in the party.
"He was leading the Nepali Congress in a very authoritarian and familial way," a diplomatic source said. "We can't say the way he ran the government was a model."
Koirala was formally named on Thursday, and is expected to be at the head of an all-party government loosely allied to the Maoists who for years had been his foes.
"The prime minister had to be the grand old man of Nepali politics in what is after all an interim government"
Matthew Kahane, UN representative for Nepal
In a 12-point statement released last November after negotiations with the Maoists, the seven-party alliance, which included the Nepali Congress, pledged not to repeat mistakes made while "in parliament and in government".
Matthew Kahane, UN representative for Nepal, said:
"The prime minister had to be the grand old man of Nepali politics in what is after all an interim government."
Koirala lives in a modest home, by standards of former Nepali premiers, in the capital Kathmandu.
He has been suffering from poor health forcing him to avoid public appearances, including a celebration rally on Thursday and his morning appointment to be sworn in as premier.