 Gibson (right) has made a significant impact in Sri Lanka |
The 38-year-old had been filling the role on a temporary basis but helped England to their first major series win on the sub-continent for 20 years.
"I am delighted to be a part of the England team in a full-time capacity as bowling coach," said Gibson.
Barbados-born Gibson won a host of awards after a successful final season for Durham in which he took 80 wickets.
He has been instrumental in helping seamers Ryan Sidebottom, James Anderson and Stuart Broad produce a string of consistent performances in the 3-2 series win in Sri Lanka.
"The way you've seen the bowlers improve and learn quickly is a credit to Ottis for communicating well with them," one-day skipper Paul Collingwood told BBC Sport.
"It does help that he's just come out of playing cricket. He's got new techniques and approaches on how to get batsmen out."
England head coach Peter Moores said: "Ottis will do a great job. He was with the performance squad last winter in Perth and did a good job over there.
"We know we're getting a good coach. He's shown over here he can have an influence over the bowlers and talk about some of the things he feels are very important to be successful."
Gibson, who played two Tests and 15 one-dayers for West Indies in the 1990s, has been involved with the England and Wales Cricket Board's fast bowling programme for the past four years.
And he will work alongside bowling coach Kevin Shine to develop England's current and next generation of pacemen.
"As a level four qualified coach who's worked with both the senior England bowlers and several younger England bowlers, I feel I'm well equipped to take up the position as fast bowling coach," said Gibson.
"With the future looking so bright for England's bowling stocks, I'm extremely excited by the prospect of working alongside Kevin Shine with such a talented group of bowlers in both the Test and one-day arenas."
Former South African paceman Allan Donald had filled the role until recently, but he did not want to continue because of family reasons.
Gibson's decision will come as a blow to Durham, who had been hoping he would return to the north east next season to improve on their second place in the county championship.
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