Gustard, who has worked with Jones since he took charge of England at the end of 2015, will join the club after England's three-test tour of South Africa next month and will have a hands-on coaching role.
"Opportunities like this don’t come along very often," the 42-year-old said on Monday in a statement issued by the club based a few hundred metres from RFU HQ in Twickenham.
"To be given the chance to lead a club as rich in talent, heritage and support as Harlequins is hugely exciting."
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Harlequins agreed compensation terms with the RFU for the release of Gustard, who was contracted with the national team until after the 2019 World Cup.
"I am a proud Englishman and it has been a privilege to represent my country and work under Eddie," Gustard added.
"There have been some incredible memories which I will cherish, and I will look back proudly on my contribution with England. I am desperate for England to do well as we push on to World Cup glory next year."
Gustard will take over at Harlequins from John Kingston, who parted company with the club last month after a 10th-placed finish in the Premiership following a typically inconsistent season.
The club confirmed they will restructure the management team and will appoint a general manager to work alongside Gustard in due course.
Jones has worked without a specialist attack coach for most of his time at England - taking on the role himself - but the lost of Gustard is a huge blow.
The ambitious 42-year-old is credited with the wolf pack defence that worked so well for Saracens and England, and Jones picked him out for special praise after his team's defensive masterclass in the 3-0 series win in Australia two years ago.
Gustard will remain in place while England seek to match that in South Africa and, coming off the back of three successive Six Nations defeats and with a poor away record against the Springboks, there will be plenty of defending to do.
After that Brad Davis, another Australian currently working at the Ospreys, has been linked with the post, while Shaun Edwards, who is Wales defence coach, and Saracens' Alex Sanderson are also contenders.
(Additional reporting by Mitch Phillips, Hardik Vyas and Shrivathsa Sridhar in Bengaluru; Editing by Ed Osmond)
