Fagan stepped down as Brisbane's coach after guiding the Lions to a third consecutive premiership a month ago.
The 65-year-old and his family are moving to Melbourne and Fagan considered a number of offers from Victorian clubs before settling on the Blues.
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"While I loved my 10 years as a senior coach, this is a role I am passionate about and where I know I can have a real impact in this next phase of my football career," Fagan said on Saturday.
Fagan will link with Josh Fraser, who was appointed Carlton's head coach after a successful stint as interim coach.
"Supporting people to get the absolute best out of themselves is what I love most about football," Fagan said.
"So the chance to now be able to do that on a fulltime basis is incredibly exciting.
"I can't wait to connect with each person in the football department and in particular work closely with Josh to help every coach and player be the best Carlton person they can possibly be."
Carlton's general manager of football Chris Davis lauded the appointment of the universally-respected Fagan.
"We want to build our football club around good people and they do not come any better than Chris Fagan," Davies said.
"Few in the game have his wealth of experience and ability to connect with and get the best out of those around him.Â
"Most importantly, he is a proven winner who knows what it takes to build a consistently high-performing environment."
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