The former Wolves defender, 32, has been promoted to the role after returning to the club as Under-18s coach in July last year.
“I’m delighted and humbled to be given the opportunity to work alongside (manager) Kenny (Jackett), Joe (Gallen), the rest of the first team staff and the players,” he told the club’s official website.
“I’m pleased that the head coach wants to take me as part of his staff and I’m looking forward to being able to help in whatever way I can.
“We enjoyed a really good season in the academy last year which is all down to a fantastic and successful group of staff who were a pleasure to work with.
“I’d like to thank Jez Moxey, the chairman, (head of football development and recruitment) Kevin Thelwell and (academy manager) Gareth Prosser for all their help over the last year.”
Former Wales international Edwards retired as a player aged 30 in October 2013.
He made 111 appearances for Wolves after starting out at Aston Villa and also had spells at Blackpool and Barnsley.