Hart served as the Indians' executive vice president and general manager from 1991 through the end of the 2001 season. During his tenure, the Indians captured six division titles and American League pennants in 1995 and 1997.
The Rangers hope Hart, 53, can work the same magic in Texas. He replaces Doug Melvin, who was fired last month.
"He's had great success, he's a great leader and he's the guy that's going to be our leader," Texas owner Thomas Hicks said.
As part of their new management team, the Rangers also named Grady Fusion, 45, assistant general manager in charge of scouting and player development.
Fusion, Oakland's director of scouting for the past six years, also was a candidate for the Rangers' general manager position. During his time in Oakland, Tim Hudson, Eric Chavez, Barry Zito and Mark Mulder were among the players that climbed through the system.
Hart announced his intention to step down as Indians GM midway through the season, citing a desire to remove himself from the day-to-day operations of the team.
But he was the first person interviewed for the position in Texas and jumped at the opportunity.
"I will pour my heart into this franchise," he said. "I will care every day about the future and present of the Texas Rangers. I want to surround myself with people who share that same passion about the Texas Rangers."
The Rangers won American League West titles in 1996, 1998 and 1999, but they have fallen on hard times with two straight last-place finishes.
Despite signing superstar shortstop Alex Rodriguez to a $250 million contract, Texas finished with a 73-89 record in 2001, 43 games behind the record-setting Seattle Mariners.
But Hart said he was attracted to the Texas job because of Hicks, the Ballpark in Arlington and a solid fan base.
"The ballpark is a very special place to play," he said. "The fan base is exciting. I watched a team struggle and still draw just under three million. These are fans that care about baseball and sports. They obviously want to see a winner."
Hart's immediate task will be to improve a pitching staff that ranked last in the American League in 2001 with a 5.71 ERA.
"Part of what we are going to be charged with is not only the short term, but the long term, to be a championship contending ballclub annually," he said. "To me, that means going into September with a chance to win and having an opportunity to be a playoff club.
"You do that by having strong players coming through your system. That's the only way to do it. The acquisition of young talent, the development of young talent is going to be the cornerstone of what will allow us to sustain success."