U.S. Tennis Association officials also said Monday Fernandez will become the U.S. team captain in 2009.
"I anticipate an exciting final year as captain in the hopes of bringing the Fed Cup home to the U.S.," said Garrison. "Mary Joe and I are looking forward to building a strong transition as she evolves from coach to captain over the course of 2008. I can think of no better person to assist as coach in 2008 and serve as captain in 2009."
Garrison has led the U.S. Fed Cup team since 2004, taking over for Billie Jean King. With her as captain, the United States has one runner-up and three semifinal finishes.
The United States opens its 2008 Fed Cup play Feb. 2-3 with a quarterfinal match against Germany in California. The United States has won the international women's tennis tournament, which is similar to the men's Davis Cup, 17 times but hasn't won a championship since 2000.