Bracewell, who coached New Zealand to the semi-finals of the 2007 World Cup and recently finished a second stint with English county Gloucester, has signed a contract until 2017.
"He has agreed a deal with us, subject to work permit approval, until the end of 2017, which we both feel is the right time to review our position following the completion of the ICC Intercontinental Cup, which is now the pathway event to the new Test Challenge," Cricket Ireland performance director Richard Holdsworth said in a statement.
"We feel John's knowledge gained over a 25-year period in the first-class game will help further develop our current players, but also ensure succession planning for our future squad who aim to be playing test cricket by 2019."
The 57-year-old Bracewell, whose nephew Doug is an active test bowler for New Zealand, played 41 tests and 53 one-day internationals for the Black Caps as an offspinner and capable batsman throughout the 1980s.
He takes over a team that failed to make the quarter-finals of the World Cup in Australia and New Zealand but won admirers by upsetting West Indies and Zimbabwe.
"There is nothing I enjoy more than fighting for a cause, and in cricket terms there is none better than obtaining test status," Bracewell said.
"Already Ireland have achieved tremendous international results given its financial resources and has gained respect at international tournaments, to the point where they are no longer regarded as a banana skin match but true qualifying contenders."
Ireland will hope to gain further credibility with victory over England in a one-day international match at home on May 8.
(Reporting by Ian Ransom in Melbourne, editing by Nick Mulvenney)
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