The 35-year-old begins his second spell after a previous six-year stint at Ospreys, initially joining in 2005 as a WRU performance skills coach to help develop programmes in the newly formed academies across Wales.
In 2008 Rees' role was expanded to encompass coaching the senior Ospreys squad as well as monitoring and developing individual performance.
Rees was head coach of Wales under-18s last season and also spent eight months working with RaboDirect PRO12 rivals Aironi on a secondment basis, and now he is raring to go again with the Ospreys.
"This is a really exciting opportunity for me and I can't wait to get stuck into it," said Rees. "I realise that working for a region with such high expectations, both internally and externally, comes with real pressure.
"But I believe that along with Steve Tandy and Jonathan Humphreys I can help to move the Ospreys forward. I know this group of players very well and believe that I can help them to continue improving.
"I'm passionate about player development and believe that the pathway in place at the Ospreys can help to ensure not only the long term sustainability of the region, but importantly, that we are able to remain competitive at the top end of the game, something that all Ospreys fans will expect.
"I've been away from the region for a short while and the experience I've gained in Italy will prove invaluable, allowing me to understand other rugby cultures and to look at a different way of working.
"With the experiences I've got at international level and my knowledge of the group of players we'll be working with, I'm optimistic about what we can achieve here."
With the Ospreys on course to secure a play-off spot, chief operations officer Andrew Hore believes his new coach's knowledge of the game can be a huge boost for the region.
"Gruff is a young coach who has already gained enormous experience and an outstanding reputation in the game" said Hore. "He is renowned for his talent ID and development work, areas in which his record speaks for itself.
"His passion for skills development is essential if we are to change our game to play a more expansive style of rugby. Gruff will have an important role to play at the Ospreys as we look to the future."
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