Former assistant coach Steve Bould will now lead the Under-23 team and work with academy manager Per Mertesacker to help transition young players to the first team. The changes will come into effect on July 1.
"We are delighted with the impact Freddie has made in helping to develop our young players into the first team and he fully deserves this promotion," the club said in a statement.
"Alongside his new coaching responsibilities, Freddie will have a strong focus on the young players who are moving into the first team group."
Ljungberg played for Arsenal from 1998 to 2007 and made 325 appearances, scoring 71 goals, and was also named the Premier League's player of the season in 2001-02.
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"I'm really excited by this opportunity to continue helping develop and work with some of the great young players... and to work alongside Unai and his coaching team to help Arsenal win trophies," Ljungberg said.
"I'm looking forward to working in this new structure and to pass on my experience and knowledge about what is needed to succeed at this level."
Ljungberg will be tasked with helping Emery guide Arsenal back to the Champions League after the club failed to qualify for Europe's premier club competition for the third consecutive season.
The new Premier League season begins on Aug. 9.
(Reporting by Rohith Nair in Bengaluru, editing by Pritha Sarkar)
