Katich, the captain of Australian state New South Wales, replaces all-rounder Graeme Welch, who is stepping down after one season in charge to concentrate on his own game.
"I have been fortunate to play under some great captains and have led New South Wales so I intend to bring all that experience to Derbyshire and carry on the progress the club made under Graeme," Katich said in a statement Tuesday.
Commenting on the county's new captain, coach Dave Houghton said: "Graeme was an outstanding captain on and off the field for us last year but in Simon we had a natural alternative and proven leader."
Katich, 31, has played 23 Tests and 45 one-day internationals for Australia. But he has not featured at Test level since the 2005 home series against the West Indies and his last one-dayer was also against the West Indies, in Kuala Lumpur, in September.
The form of the likes of Michael Hussey, Andrew Symonds and Michael Clarke has seen Katich drop out of international contention but the recent retirements of batsmen Justin Langer and Damien Martyn could yet spark a revival in his Australia career.
Katich, who has also played for his native Western Australia, has had plenty of experience of the English county game during spells with Durham, Hampshire - where he played under Australia great Shane Warne - and Yorkshire.
His arrival at Derbyshire means the Midlands county will have two Australian overseas players in the 2007 season with Tasmania batsman Travis Birt already on board at the County Ground.
Katich, an occasional left-arm spinner, has scored 1,260 Test runs at an average of 36 with two centuries and averages just under 36 in limited overs internationals.
He also boasts an impressive first-class record of 11,190 runs at a touch under 50 with 30 centuries and a best of 228 not out.
Derbyshire finished fifth in the Second Division of the County Championship last season when they broke their four-year run without a home win in English cricket's first-class competition.