The former Great Britain Rugby League international will take charge of all aspects of Welsh rugby outside the senior national squad.
Lydon who is currently the Performance Director of the Wigan Warriors Rugby League club will take a seat on the Executive Board of the Welsh Rugby Union and report directly to the Group Chief Executive, Roger Lewis.
In his new role he will manage a new WRU development structure which oversees the elite game through to its roots in the community clubs and schools.
Roger Lewis said: “I promised we would secure someone special for this vital role and I am delighted to be able to announce that we have achieved that aim in appointing Joe Lydon.
“The Head of Rugby role is a key appointment in our senior management team and heads a structure which controls and develops all aspects of the game in Wales.
“Joe’s rugby and business CV speaks for itself and when I met him I was impressed by his knowledge of Welsh rugby and his clear strategic thinking on the way forward for Wales.
“All of us know about his legendary status as a player and I know the whole of Wales will grow to respect his rugby intelligence and management skills.
“We have been through a challenging restructuring process and I know that Joe realises he will be taking charge of a talented and skilful team because of that.
“There is a lot of hard work to be done but Welsh rugby is now in the right shape to meet the challenges of the future.
“The business delivered a record turnover of £50.3million this year and Warren Gatland’s Wales team brought home our tenth Grand Slam. Now the appointment of Joe Lydon is clear proof that we are not prepared to lose our rapid forward momentum.”
Forty four year old Joe Lydon earned legendary status as a rugby league outside back playing over 300 hundred first team games with Widnes, Wigan and Sydney City Roosters as well as gaining 30 international caps for Great Britain RL.
A stellar professional career spanning over 12 years saw Lydon gain a host of team and individual awards which included the sport’s Player of the Year in 1984 (Man of Steel Award), Lance Todd Trophy (Challenge Cup Final Man of the Match) and Harry Sunderland trophy (Premiership Final Man of the Match). He was a Challenge Cup final winner on five occasions with Wigan between 1988 and 1993.
After retiring from rugby league he became the Wigan Team Manager and then Performance Director of the Rugby Football League.
In his role at the Rugby Football League, Lydon was responsible for winning the sport’s first multi million pound World Class Performance lottery bid from Sport England, an award that has provided significant help in driving the game forward in the UK.
After swapping league for rugby union, he progressed from being England U19 and then Sevens head coach to become backs coach for the senior England team in the course of seven years.
With the WRU he will manage a new structure which oversees the elite rugby development pathway including age grade, sevens and women’s squads along with a remit to take charge of the community game across all the divisions. He is also tasked with forging a strong relationship with Warren Gatland and the national squad to ensure that all the systems and structures throughout professional rugby in Wales are aligned to the requirements of the national team.
Joe Lydon said the opportunity of taking up a role at the heart of Welsh rugby proved a huge incentive to accept the exciting challenge.
He explained: “I look forward to drawing on my experiences gained from being involved in professional rugby of both codes over the last 25 years and feel confident that this role will provide opportunity and challenge within one of the most passionately supported rugby playing nations in the world.
“Just as it is in my hometown of Wigan, rugby in Wales is much more than a sport, it’s a way of life.
“The new role will enable me to draw on that passion, the unique sporting history and pedigree of rugby in Wales. Working with all like-minded partners throughout the game and in so doing assist the WRU in its vision and an ambition for the enhancement and development of rugby in Wales.
“A lot of hard work is already taking place and I will be making sure that continues within a clear strategy and focus.”
The Chairman and owner of Wigan Warriors, Ian Lenagan, said:
“Although I am sad to see Joe leave Wigan I take it as a compliment that the WRU have taken note of the great work we are achieving here and recognise the calibre of individual we have on board. I would like to wish him all the best for the future”
A key objective of his new role is to devise systems and strategies to nurture and develop talent and build participation.
WRU Chairman, David Pickering, said: “We knew the Head of Rugby Development role required someone with a playing, coaching and administrative history from the top draw of the game.
“Joe Lydon has the qualities to deliver the right results for rugby and the right results for Wales at a time of great change in our game.
“I know he will earn the respect of our clubs because he is a true rugby man who will use his talent, experience and integrity to make the best decisions for the game here in Wales.”
Wales head coach, Warren Gatland, added: “I have talked to Joe about the challenges and the way forward for Welsh rugby and I am impressed by his knowledge and his professionalism.
“I am looking forward to working closely with him and I see this as an extremely positive appointment which will undoubtedly benefit Welsh rugby.”
Wales Assistant Coach and former Wigan rugby league great Shaun Edwards said: “Joe is a man of integrity and a man of vision who will give his all for Wales and Welsh rugby.
“I know he gives one hundred percent in everything he does and he will have a hugely positive influence on rugby in Wales.”
Wales Under 20 head Coach and former Wales international, Phil Davies, said: “I think this is a fabulous appointment. I worked with Joe while he was with the England academy set-up and I am looking forward to working with him again.”
Joe Lydon will take up his new role on December 1 2008 and will eventually be based at the new WRU Centre of Excellence at the Vale Resort.