The former All Blacks international will link up with the Blues following the completion of his season in the Super 15 with the Hurricanes.
Hammett, 41, will front an exciting new-look coaching team at Cardiff Arms Park with Dale McIntosh and Paul John.
The Christchurch-born ex-hooker has carved out a reputation as one of the most exciting and leading coaches in the Super 15 following spells at the Crusaders and Hurricanes.
Hammett, who won 29 caps for New Zealand between 1999 and 2003, made his name during his playing career with the Crusaders, where he won four titles.
He retired in 2003 and joined the coaching staff at Crusaders while also working with Canterbury in the Air New Zealand Cup.
Hammett took over as Head Coach at the Wellington-based Hurricanes in 2011 and is currently leading the team as they push for the end of season play-offs.
Richard Holland, Chief Executive at Cardiff Blues, said: "We conducted an extensive worldwide search, with the help of Wales coach Warren Gatland and Gareth Edwards, and are absolutely delighted that Mark Hammett will be taking the role of Director of Rugby.
"Chief (Dale McIntosh) and Johnsy (Paul John) have done a terrific job over the last few months and I know they are looking forward to working with Mark. They will form a strong partnership and we are excited to see that take the region forward.
"I have met Mark and he was the outstanding coach and person for the role. We believe his long-term vision for the Blues with take us to the next level and achieve our ambitions.
"We've made strong signings with New Zealand international Jarrad Hoeata, Italian back row Manoa Vosawai, Craig Mitchell, Josh Turnbull, Tavis Knoyle, George Watkins and Ieuan Jones joining us. We're working hard on more signings and are positive about the way they will work with our talented existing squad under the guidance of Mark Hammett.
"It has always been our commitment as a region to be sustainable off the field and a competitive and successful on it.
"We've made the business sustainable since the return to the Arms Park and now, under the leadership of Mark Hammett, we believe the Blues can start to once again look forward to a bright future."
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