The Austrian champions have secured the services of the former France boss and Schalke coach, while appointing Roger Schmidt as their new manager following Ricardo Moniz's exit
The former Schalke manager had been out of work ever since he quit the Bundesliga side last season due to exhaustion, and had since been linked with a number of clubs.
However, he has now made the decision to say farewell to coaching for now as he has accepted Salzburg's offer to become their new sporting director.
The 64-year-old Houllier left Aston Villa in June 2011 by mutual consent after being plagued by health problems.
Furthermore, Red Bull Salzburg have also found a replacement for head coach Ricardo Moniz, who resigned earlier this month, with the appointment of Roger Schmidt as the new manager.
Schmidt previously coached Delbrucker, Preussen Munster and Paderborn, whom he guided to fifth spot in the 2. Bundesliga last term.