Although his move to Cape Town was an open secret, the Stormers confirmed his capture on Monday.
He replaces Allister Coetzee, who has left for Japanese side Kobe Steel after six seasons in charge of the Stormers, which included a final loss to the Bulls in 2010.
"Eddie was always on my mind in terms of potential external candidates and it's a massive coup that we have signed a coach of his ability -- his coaching credentials and achievements speak for themselves,” Stormers Director of Rugby Gert Small said in a statement.
Jones will arrive in Cape Town at the conclusion of his World Cup commitments.
"We will get Eddie here as soon as we can after the Rugby World Cup so he can get started with his 2016 preparations,” Smal added.
“He is obviously focusing on Japan's World Cup campaign at present, where he has already made a significant impact.”
Jones, who coached Australia to the 2003 World Cup final and was a technical advisor to South Africa when they won the tournament in 2007, believes the time is right for a fresh challenge.
"I am well aware of the responsibilities that come with this job, one of the biggest franchise jobs in world rugby, but I am also excited about the talent available in the Stormers squad and the potential of this playing squad.
“This is a challenge I am looking forward to," he said.
Jones won the Super Rugby competition with Australia's ACT Brumbies in 2001.
(Editing by Justin Palmer)
