The 32-year-old club captain and Town Foundation patron has called time on his playing career to replace Jason Gillespie on a three-year contract.
Australian Gillespie left at the end of the season after leading Yorkshire to the County Championship title in both 2014 and 2015.
This year they finished third, missing out on the title to Middlesex on the final day (Somerset were second).
Dewsbury-born left-handed batsman Gale has spent his entire career at Yorkshire.
He has been captain for the last seven years.
Former Australia fast bowler Gillespie, 41, had been coach for five seasons.
Under Gale’s captaincy, Yorkshire won promotion to Division One of the Championship in 2012 - Gillespie’s first summer in charge.
They were runners-up in 2013.
Yorkshire were beaten in the T20 Blast and One-Day Cup semi-finals this summer.
The county considered 16 candidates for the position, while England assistant Paul Farbrace is believed to have turned down the opportunity of a return to his former club having worked at Headingley between 2012-14.
Instead it will be Gale who assumes control alongside Martyn Moxon, who will continue his role as director of cricket, although the move is something of a risk with Gale’s only previous coaching experience coming at a company he runs outside of the game.
Gale admitted the move into coaching had come sooner than expected, despite averaging just 21 with the bat during the past four-day season.
“I didn’t expect the opportunity to come as early as it has, but it is too good to turn down,” he said in a statement.
“In taking up the role, I have ended a memorable playing career at Headingley, however, the challenge ahead of me is one that truly excites me.
“As first XI coach, I aim to continue the good work that has been done over the past five years with the excellent support staff that we have here.
“I cannot wait to roll my sleeves up and get stuck in.”