The German club confirmed that Demichelis had signed a two-year contract running until 30 June, 2028, as they looked to bring fresh ideas and international experience to the team.
RB Leipzig sporting director Marcel Schafer praised the 45-year-old's background across different football environments and believes he can help the club continue its development.
"With Martin Demichelis, we are gaining a head coach who has gained experience as a player and coach in Europe, South America and North America, working at the highest level," Schafer said.
"This international perspective fits perfectly with RB Leipzig and its global focus. Martin combines a clear playing philosophy with high intensity and professional expertise."
Demichelis arrived at Leipzig after most recently managing La Liga side Mallorca, having previously taken charge of some of South America's biggest clubs.
The Argentine began his coaching career as an assistant at Malaga before working with the youth teams at Bayern Munich, where he had enjoyed a successful playing career.
He later became head coach of River Plate in Argentina and guided CF Monterrey in Mexico before making the move to Spain with Mallorca.
Leipzig believe Demichelis' experience as both a player and coach will help the club push forward as they prepare for a new campaign.
"We are convinced that he will give our team important impetus and play a key role in shaping the club's continued success," Schafer added.
