The 53-year-old, who has also coached at Llanelli and Cardiff Blues, will sit on the WRU's executive board.
John will step up from elite coach development manager to one of the two new WRU positions replacing the old head of rugby Josh Lewsey.
"I'm looking forward to working with the regions and Premiership clubs so Wales reaches its potential," he said.
John returned to the Wales set-up - which has won four Six Nations titles, including three Grand Slams since 2005 - in September 2015.
John had worked as Canada's high performance manager and sevens coach before joining Australia as director of sevens and sevens head coach.
"Geraint has impressed everyone since his return to Welsh rugby last year," said WRU chief executive Martyn Phillips.
John will work alongside a new WRU new head of rugby participation - a role that has not yet been filled, which will concentrate on improving the amateur game.
Former Wales assistant coach Geraint John has been appointed the Welsh Rugby Union's new Head of Rugby Performance.