Oklahoma announced the hire Monday. Murray, 31, played for the Sooners from 2007 to 2010 before he was selected by the Dallas Cowboys in the third round of the 2011 NFL Draft.
The three-time Pro Bowl selection last played in the NFL during the 2017 season for the Tennessee Titans. Murray served as the running backs coach at Arizona in 2019. He was a TV analyst in 2018 for Fox Sports.
"This is very surreal," Murray said. "Obviously I never thought I'd be back coaching at the place where it all started for me. Having the opportunity to come back and be among great coaches and be with some of the people I grew up with is exciting. I'm thankful for the opportunity coach [Lincoln] Riley is giving me, and I'm looking forward to being back home."
Murray is the Sooners' all-time leader in all-purpose yards (6,718), including 3,685 rushing yards, 1,571 receiving yards and 1,462 return yards. Murray also is the Sooners' leader in touchdowns at 65.
"This is a really exciting day, being able to welcome one of our program's all-time best players back to Norman," Riley said. "DeMarco had a tremendous playing career both at OU and in the NFL and has a passion for coaching and helping young men grow as players and people.
"He's got an incredibly bright coaching future and will be an outstanding mentor to our players. I don't think there's anyone better to lead our running backs. Everyone in our program is excited to have DeMarco, his wife Heidi and their children as part of our family."
The Sooners led the Big 12 with 3,363 rushing yards and 38 scores in 2019. Oklahoma had the eighth-best rushing offense in the nation last season.