Larkham, a former flyhalf who played 102 times for Australia, has combined his job at the Brumbies with the role of 'attack coach' for the Wallabies under Michael Cheika since last February.
The 42-year-old World Cup winner has committed to the post with the Wallabies until after the 2019 World Cup, the ARU said in a statement.
"I have really enjoyed working with this current Wallaby group, as well as the national coaching group," Larkham said."I hope we can continue to grow to be where we know we can be, and I'm looking forward to being part of that."
Cheika also has a contract until after the 2019 World Cup and Larkham's appointment to a full-time position has all the hallmarks of Australia looking to emulate New Zealand's successful coaching succession planning.
Larkham helped the Brumbies to two Super Rugby titles as a player and has led his hometown team to the playoffs in each of his three seasons in charge in Australia's capital.
"It will be very tough to leave but I will continue to be based in Canberra and involved with the Brumbies," he added."I will be totally committed to having a successful 2017 with the Brumbies, and support the club in its recruitment of a new head coach for 2018 and beyond."
(Reporting by Nick Mulvenney; Editing by Peter Rutherford)
