Gustard, who has been at Stade Francais since 2022, steps up from the role of defence coach to take over from Karim Ghezal who was sacked last month.
Laurent Labit remains as director of rugby in overall charge of what goes on on the field.
"The new coach's remit will include the development of rugby and strategy," Stade Francais said in a statement.
Gustard, who was a part of Eddie Jones' England set-up from 2016 to 2018, was mooted as a possible replacement for Felix Jones when he handed in his resignation as Steve Borthick's defence coach.
That role ultimately went to former Bristol flanker and current Oyonnax coach Joe El-Abd who said last week he was with England "for the long haul".
Stade Francais, who have the second biggest budget in France, are currently 13th in the Top 14 after six rounds, having slumped to a 35-3 thrashing at Lyon on Sunday.
