Mallett's three-year contract would involve him coaching spinners from grass roots level right up to the national team and he would also train other coaches, Sri Lanka cricket said.
His contract commits him to four two-week visits to Sri Lanka each year with the first stint scheduled to start next week in the Max Cricket Academy in Colombo.
Mallett, 60, is the latest foreign expert to be hired by Sri Lanka's cricket board.
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Mallett played 38 Tests for Australia, taking 132 wickets at 29.84. In a 183-match first-class career he claimed 693 wickets at 26.27.
