Kafer joined the Watford-based club at the end of last season after a stint with Leicester Tigers as player/coach and now finds himself in the Saracens hot seat, recently vacated by former All Black skipper Wayne 'Buck' Shelford who lasted just one year at Vicarage Road.
After accepting the new role, Kafer, who won 12 caps for his country, will not feature as a player in the coming season in order to concentrate on the task in hand.
His first duty will be to find a forwards coach – an appointment which is expected to be confirmed in the next few days.
"I'm really pleased to have been appointed the new head coach," Kafer told the Saracens website. "I had planned only to play during the World Cup but when the opportunity arose I didn't have to think too long about hanging my boots up a few months early.
"Pre-season training has been going well and when Mark discussed the opportunity with me I knew it was the right thing for me to do.
"I've been involved with a lot of decisions in relation to the new season at the club and have contributed to discussions on the make-up of the team that has been put together both on and off the pitch.
"I've effectively been leading the coaching since July and our discussions centred on the fact that there was a good amount of continuity already within the camp and we wanted to build on it.
"The new conditioning team has been working very hard with the players over the last four weeks and we will begin to start focusing on unit and individual skills as the season approaches.
"Inevitably the question will be raised about our goals and aspirations for the upcoming season. I don't want to try and predict the future, so our focus will be performance-related. Improving our conditioning levels and defensive strategies are going to be our core areas of work right up until the season starts."
This announcement ends months of speculation over who would succeed Shelford, with several names linked to the club.
It was widely predicted that Australian Under-21 coach Laurie Fisher would take over, but Fisher decided to remain at Super 12 side, the ACT Brumbies.
Now Saracens Chief Executive Mark Sinderberry has opted to hand over full reponsibilities to Kafer, who had been put in temporary charge of summer training.
"Throughout the appointment process I kept on coming back to the fact that nothing I was seeing was any better than what we already had in place," said Sinderberry.
"As pre-season training got under way the reports from the players and other coaches have been very impressive and it became obvious that the natural successor was already in place. The seal of approval came last week when I discussed the appointment with the senior players and Taine Randell, who endorsed my decision.
"I've obviously known Rod since our days back at ACT Brumbies where he played a big role in our success from 1996. He then moved to Leicester for a two-year spell before agreeing to join us back in May.
"He originally came on board as a player-coach, but now he has got his teeth into the role over the summer he was keen to extend it and after discussion he emerged as the perfect choice to carry us forwards.
"Rod has the respect of the players and the staff and we have talked at length about our vision for the club and our game."