The 52-year-old coached the Stormers and Western Province in the Super 14, before a stint with Japanese side Kobe Steel Kobelco Stealers.
He succeeds Heyneke Meyer, who resigned in December after leading the Springboks to third place in last year’s World Cup.
“The appointment of Mr Coetzee is historic and I congratulate and wish him well on his tenure as the coach of our Springboks. Mr Coetzee has an impeccable experience record on the field as a player and off the field as a coach. I trust that SARU has familiarised him with our Transformation Agreement and the expectation from its implementation. The coach will need a lot of support and I urge all South Africans to support their team and its coach in both difficult and good times. Mr Coetzee has my unreserved support,” Mbalula said.
"I am very excited and grateful for this opportunity," Coetzee said. "This job comes with a huge amount of responsibility because our passionate fans rightfully demand the best from the Springboks at all times."