Richards replaces Gary Gold at the helm at Kingston Park once his three-year ban for his involvement in the 'Bloodgate' scandal ends in August.
The former England No.8 had been linked to roles at Worcester and Sale, however the vision of the Falcons owner Semore Kurdi tipped the balance.
Richards, who will link up with former Leicester colleague John Wells at Kingston Park, told the club's official site: "I am delighted to get the opportunity to join Newcastle Falcons. Whilst there was interest from other clubs, there are two reasons why I chose the Falcons - the supporters and Semore Kurdi's ambition for the club.
"I met up with Semore and his vision made my mind up.
"The Falcons fans are very enthusiastic about their rugby and they are fantastic people with a great sense of humour who you can enjoy a laugh with."
Kurdi is delighted to have completed a deal to bring Richards to the club.
He added: "It is not often that you get a chance to work with two people as talented and accomplished as Mr Dean Richards and Mr Gary Gold.
"Dean needs no introduction in the world of rugby, and it will be a true honour to have him at Newcastle Falcons next season.
"In the meantime, we are 100% behind Gary and his team who have and who continue to work magnificently as we fight to preserve our Aviva Premiership status.
"The progress we are making and the tremendous support from our loyal fan-base is crucial in our fight to stay in the Aviva Premiership and I guarantee that Gary and his team will have the support of everyone associated with the Falcons as they have mine over the challenging weeks ahead between now and the end of the season."
Richards started his coaching career at Leicester Tigers, winning four Premiership titles and two Heineken Cups at the club, where he spent 15 years as a player.
He then took over at Harlequins in 2005 when the Londoners were in the second tier and led them back into the Premiership, establishing the club as a force in the top flight.
However he resigned following the Bloodgate scandal in 2009- which saw Richards handed the lengthy ban.
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
$29.99
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.
