Tait, capped 27 times by Scotland and a Test Lion in South Africa 11 years ago, will concentrate on defence, skills and backs coaching at Kingston Park.
He links up with recently-appointed rugby director Steve Bates and rejoins a club he helped win the Premiership title in 1998.
Tait, who also enjoyed a successful rugby league career that culminated in several Great Britain appearances, will return to Tyneside from his specialist coaching role with the Scottish national team.
Bates said: "Alan is someone with a tremendous knowledge of the game, both from a playing and coaching perspective, and I see him as a vital part of our future plans.
"Alan brings outstanding characteristics to the role, and he will look at our defence in a very specialist manner.
"This is an area where I believe we have needed real expert help due to the number of tries we have leaked, and with Alan's expertise we will look to see significant improvements there, as well as our back play and general skills."
Tait added: "My attitude as a coach is very similar to what motivated me as a player - I want to be the best.
"I want to make it clear I am not moving for money. The role that Scottish Rugby had offered me, where I was to be working on defence duties with the national team, the Edinburgh pro-team and, ultimately, other representative sides, was attractive, but I've opted to join Newcastle because I feel at this stage of my coaching career it is what I need."
Tait's commitments with Scotland will end after the two-Test Argentina tour next month.