The 37-year-old Farrell rose through the coaching ranks at Saracens after retiring from the sport in April 2009.
After impressing in his role as skills coach, he was promoted to first team coach 18 months later, and joined then-interim England boss Stuart Lancaster's staff for the 2012 Six Nations tournament.
And with Lancaster now installed on a permanent basis, an agreement has been reached for Farrell to re-unite in the national set-up.
Farrell will begin his second spell with England from July 2.
“I loved every minute of coaching England and working with Stuart (Lancaster) and Graham (Rowntree) and this group of players in the Six Nations and to get the opportunity to do it permanently is a dream,” Farrell told the Saracens website.
“I have watched England in South Africa and I am massively excited about the potential that was clearly evident in the three Tests and midweek matches.
“I had seven very special years with Saracens and the club will always have a fond place in my heart.
"I am grateful for the help they have given me as a player and a coach and I wish everyone involved the best in the future."
Lancaster added: “I am delighted that we have got Andy on board.
"He is a special coach and an individual and the way this team has developed is a testament to the foundations that we laid in the Six Nations.
Andy, Graham and myself work well together and I am looking forward to carrying on that close relationship over the next three-and-a-half years as we build towards a home World Cup.
"As I said the other day, I will continue to review the make-up of the coaching team over the next few weeks to ensure that England has the best structure and personnel.”