Hughes, who won 112 caps for his country over two decades, ended his playing career in 2019 following stints with the likes of Newcastle, Aston Villa, Fulham and Hearts.
The 42-year-old has just completed an administration and management course run by UEFA in Geneva, aimed at fast-tracking those with international experience.
A statement from the IFA said his new role would be a wide-ranging brief covering high performance across men's and women's football and a step up from his previous position as a consultant.
With the Northern Ireland managerial position currently vacant following Ian Baraclough's departure, Hughes will surely have a say on the appointment. That opens up the possibility of some neat symmetry, should Michael O'Neill be tempted back into the hot seat.
Hughes was retired when O'Neill first took over in 2012, but was persuaded back for another shot at international football and went on to spend another six years in green, including a trip to Euro 2016.
Now it is O'Neill who may be asked to ponder a return to Windsor Park, a situation that may be more appealing after Hughes' arrival. Another possible candidate, Linfield boss David Healy, shared many unforgettable moments alongside Hughes as team-mates.
"This is an exciting time for the Irish FA and I am eager to get started in playing a key role in all areas of our operation," said Hughes.
"People often underestimate the reach of the Irish FA. We are central, along with our partners and stakeholders, to shaping people's lives through football and I am looking forward to making a positive contribution at every level of the footballing pyramid."
Irish FA chief executive Patrick Nelson said: "Aaron has demonstrated his considerable talents to the organisation since he joined us as a consultant last year.
"His relentless drive to push for high standards across the entire performance pathway, rooted in his deep experience gained at the top end of the professional game, will help the organisation flourish even further.
"He will be a key contributor to a range of major developments set out in our current strategy, A Roadmap for Football."