The two agencies beat Fallon Worldwide in a final pitch to win the business, after a second presentation last week.
The business was previously handled by Euro RSCG New York, which was eliminated from the pitch list last month, along with 180 Amsterdam, when the list was reduced to two.
However, Euro RSCG retains the creative account for Asia/Pacific, which was not part of the review. It is believed the Asia/Pacific business will be put up for review next year.
The pitch was overseen by Tim Ellis, Volvo director of global advertising.
Ellis said: "Through focused strategic thought and an inspiring creative idea we believe they are the best agency team to accelerate the momentum of our brand."
The Arnold/Nitro team will be led from Arnold's Boston office and its first task will be to develop global launch campaigns for the new V70 and XC70.