Emtage, 34, was assistant to Bill Millard in last season's IRB Sevens competition as well as enjoying success at senior club level in Brisbane as head coach of Sunnybank for the past three years.
The club are currently top of the 2005 table.
"I have always had an ambition to coach at the Reds but have never put any timeline on it," Emtage said in a statement.
"I am obviously thrilled to have the opportunity to work with so many talented players and it will be a new experience for everyone.
"I have always looked to teach the game to be played with logic and to develop intelligent performance among my teams.
"I hope the Reds players enjoy the change and I can't wait to start."
One of Emtage's first jobs will be to help Reds coach Jeff Miller find a successor to Wallabies winger Wendell Sailor, who has joined the NSW Waratahs.
Despite Sailor's departure, the Reds do have plenty of talent in their backline with veteran Ben Tune set to play on in 2006 after missing almost two seasons through knee surgery.
And new Australia cap, centre Lloyd Johansson, who scored a try with only his second touch against the All Blacks in Auckland last Saturday, will give Emtage plenty to work with.
Emtage began coaching in 1998 after a playing career that saw him win two caps as fly-half for the Reds in 1993.
"The Reds forwards coach Alex Evans was my coach at Souths and it will be great to work with him again with Queensland.
"I believe with all the talented young players the Reds have that we can surprise a few people and have a very successful season," Emtage said.
Miller said he was looking forward to working with Emtage.
"Damon was very professional in his interviews and greatly impressed both myself and also Ben Tune who was part of the selection panel," Miller said.
"He had some terrific ideas and opinions, has proved himself at club level and I am confident he can take the next step to Super 14."