Hohns remains the chairman of selectors for the test and one-day international teams.
Former international batsman Waugh had previously been assisted by former head coach Darren Lehmann in selecting the Twenty20 team.
"We believe the changes to the structure of the selection process will deliver the best possible result for the Australian men's cricket team across all formats," CA high performance manager Pat Howard said.
"Having a selector focus on the T20 format for the past 18 months was viewed as a success, particularly as we now sit third in ICC rankings in this format, and we will look to continue this in a slightly modified way.
"This sees Justin take on additional responsibility as both the head coach and lead selector in Twenty20 cricket, as we build towards the ICC World T20 in Australia in 2020."
Howard added that the state associations' talent managers and Big Bash League coaches would also feed into the selection process.
The team's next Twenty20 series is away against world number one Pakistan in October.
(Reporting by Greg Stutchbury; Editing by Ian Ransom)
