The man who steered the 1997 British & Irish Lions to a famous Test series victory in South Africa from the No 10 jersey will take over the role in his native Scotland from Glasgow Warriors coach Sean Lineen.
His former Scottish team mate Lineen joined head coach Frank Hadden's back room staff for last summer's tour to Argentina and this seasons November internationals, but has decided to return to his club duties.
"Gregor has already made a considerable impact in working with the players at Edinburgh and Scotland A," said Hadden about the appointment.
"The support he has championed for players through the Winning Scotland Foundation's mentoring programme underlines the appetite from elite players for the experience and technical guidance that he brings.
"I think it significant too, with all Gregor's experience as a player, that he will be able to offer one-on-one advice to Scotland players. That insight can only be valuable especially in the year of a British and Irish Lions tour."
Townsend won a then record 82 caps for Scotland between 1993 and 2003. he played outside half and centre and became feared as one of the world game's great game breakers.
He scored 17 tries within a 164 points haul for his country - he scored a try in each of the four Five Nations games in 1999, matching the 1925 Scottish record of Johnnie Wallace - and was awarded the MBE in the 1999 Queen's Birthday Honours List for his services to rugby.
He made six appearances for the Lions in South Africa, including the two Test victories, and scored 13 points.
He will be working alongside Hadden and his assistant coaches, Mike Brewer and Graham Steadman. Lineen and his Edinburgh counterpart, Andy Robinson, will continue to be involved in national team selection.
"I'm delighted to have been invited by Frank to become backs coach for this year's Six Nations. I can't wait to get started working with the players and the challenge of getting them to perform consistently at their best level," said Townsend.