Farrell, who helped England to second place in the RBS 6 Nations, has agreed a three-and-a-half year contract through Rugby World Cup 2015 to January 31, 2016.
“I loved every minute of coaching England and working with Stuart (Lancaster) and Graham (Rowntree) and this group of players in the Six Nations and to get the opportunity to do it permanently is a dream,” said Farrell.
“I have watched England in South Africa and I am massively excited about the potential that was clearly evident in the three Tests and midweek matches.
“I had seven very special years with Saracens and the club will always have a fond place in my heart. I am grateful for the help they have given me as a player and a coach and I wish everyone involved the best in the future."
England Head Coach Stuart Lancaster said: “I am delighted that we have got Andy on board. He is a special coach and an individual and the way this team has developed is a testament to the foundations that we laid in the Six Nations. Andy, Graham and myself work well together and I am looking forward to carrying on that close relationship over the next three-and-a-half years as we build towards a home World Cup. As I said the other day, I will continue to review the make-up of the coaching team over the next few weeks to ensure that England has the best structure and personnel.”
Ian Ritchie, Chief Executive Officer of the RFU, added: “I’d like to thank Saracens for the professional manner in which this has been concluded and am very grateful for their agreement to recognise the national interest and to accept Andy’s early release from his notice period. I know how much Andy enjoyed his years with Saracens and it is a great credit to the club that they have helped him develop so quickly into what we are confident will be a fine international coach. This is another positive step forwards for Stuart and the England team as we look to build towards the QBE Internationals and beyond.”