The Pakistan Cricket Board (PCB) announced in a statement that Waqar had been given a two-year contract.
The former fast bowler was also given the job in 2010 before quitting in late 2011 for personal and health reasons.
"I am extremely pleased to have been selected as head coach," Waqar said on Tuesday. "My immediate aim is to prepare the team for the upcoming busy cricket season including next year's World Cup."
Waqar was the hot favourite for the role after Australian Dav Whatmore decided in February not to extend his two-year contract with the PCB.
Another former captain, Moin Khan, was named interim coach for the Asia Cup and World Twenty20 tournaments earlier this year.
Moin has now been appointed as chief selector and manager of the national team.
Waqar, 42, who took 373 test and 416 one-day wickets, formed a formidable new-ball attack with Wasim Akram in the 1990s before retiring in 2003.
It is Pakistan's seventh coaching appointment since 2008 in a list that also includes Australian Geoff Lawson, Intikhab Alam and Mohsin Khan.
(Editing by Tony Jimenez)
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