Yzerman, who has been vice president of hockey operations for the Red Wings, replaces the fired Brian Lawton as the Lightning's on-ice architect.
Yzerman starred for Detroit for 22 years, retiring after the 2005-06 season as the sixth all-time leading scorer in NHL history. He served this year as general manager for Team Canada, which took the gold medal at the 2010 Winter Olympics in Vancouver.
"It was a very difficult decision to leave the Red Wings," Yzerman said. "I was very safe there. Early in retirement, being involved with Team Canada and the Olympics reaffirmed that this was a career path I wanted to take.
"This is a long-term project for me, building a Stanley Cup team takes time," he said. "I don't have a notion that I can wave a magic wand and make the Lightning a Stanley Cup contender."
Tampa Bay finished 34-36-12 this season, missing the NHL playoffs for the third straight year.