Sandberg, 50, a 10-time National League all-star and nine-time Gold Glove winner, previously managed farm clubs in Illinois and Tennessee.
"We are very happy and excited to welcome Ryne Sandberg to the Iowa Cubs as he continues his managerial career," General Manager Sam Bernabe said. "We know our fans are excited too and will be supportive in what we hope will be a successful season."
Sandberg retired as a player in 1997. He was elected to the National Baseball Hall of Fame in 2005.