Lydiate won 72 caps for Wales and played all three Tests for the British and Irish Lions on the successful tour to Australia in 2013.
The chop-tackling blind-side flanker was a player-coach in his second spell with Dragons and remained a member of Filo Tiatia’s management team after hanging his boots up last summer.
“I have enjoyed my experience with Dragons first as a player-coach then as a full-time coach,” said Lydiate, who also played for Ospreys and Racing Metro.
“I’ve learnt a huge amount and am grateful to have been able to combine my club coaching with an interim role with Wales this season.
“It’s an incredible honour to have the opportunity to move into a full-time role with Wales.
“I’m excited not only to continue working with Steve and the group, but also take on a broader remit to help with the development of players outside of camp as well.”
Lydiate joins Danny Wilson, Matt Sherratt and former Glasgow coach Murchie as full-time members of Tandy’s staff.
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