"I am looking forward to the challenge this position will offer in what is an exciting time, not just for Australian cricket but world cricket as a whole," Chappell said in a statement.
"Working with other coaches in the Australian cricketing system and deciding how to make the best possible use of the wonderful facilities we have available to us is something that excites me greatly."
Cricket Australia chief executive officer James Sutherland said the appointment would provide many benefits to Australian cricket.
Chappell, 60, previously coached South Australia and had a tumultuous two years in India, where he quit after the side was knocked out of last year's World Cup.
He then worked at the Rajasthan Cricket Association's Centre of Excellence, and is expected to start in his new role later this year.
Chappell played 87 Tests for 7,110 runs from 1970-84, and captained his country 48 times