Arsenal captain Per Mertesacker will take charge of the club's academy from the summer of 2018 onwards.
In the interim Luke Hobbs, who has undertaken the job on an interim basis since the departure of Andries Jonker to Wolfsburg earlier this year, will be in charge of Arsenal's youth setup.
But 32-year-old World Cup winner Mertesacker, who had begun talks with Arsenal over a non-playing role after the end of the season, will eventually take on responsibility for the development of youth players at Arsenal.
Mertesacker, who will remain a part of Arsenal's first-team squad for next season, said: "This is the start of an exciting new chapter for me and I am delighted that I will be able to stay part of the Arsenal family.
"This season I will remain fully focused on my job with the team and am looking forward to a successful last season on the pitch. After that, I look forward to the exciting challenge of helping produce young players good enough to play for the Arsenal first team."
After his inspirational performance in May's FA Cup Final win over Chelsea, when he marshalled Diego Costa with ease in his first start of the season, Mertsacker was labelled by Wenger a "fantastic example for any young professional football player".
The centre-back will now have his chance to vindicate his manager, who said: "Per is an exceptional character who is a great example for young players.
"He is a deep thinker about the game and committed to helping players fulfil their potential. He will be an inspirational figure for everyone connected with the academy."
In Pictures | Arsenal vs Chelsea, FA Cup Final | 27/05/2017
Chief executive Ivan Gazidis said: "At Arsenal, we believe in developing young players to their full potential and giving them an opportunity to shine. I am delighted that Per will take on this role.
"He understands the club's values, he knows what it takes to win at the top level and he will be the ideal person to drive the academy forward when he takes on the role next year.”
