The former England international joins the Bit O' Red in the capacity of assistant coach to Ian Baraclough ahead of the 2013 season
Stevens, 49, enjoyed a playing career which saw him line out for Everton, Rangers and Tranmere Rovers and he was capped 46 times for England.
Speaking about the appointment, Bit O' Red boss Ian Baraclough was keen to stress Stevens' experience and credentials as a coach.
"He has worked with people at the very high levels like Bobby Robson, Terry Venables and David Pleat and he is someone that will be of huge use to us," he told sligorovers.com. "I'm trying to improve the club in every aspect from players to staff to any area possible."
He added: "I believe bringing Gary in as part of our structure will be beneficial. It will never be a case of me telling him because he wànts to get his hands dirty.
"He is the type of coach that wants responsibility and will go and do it. He will work with individuals and units of the players and we can’t wait to get started."
Stevens believes that the role of assistant manager is a 'great opportunity' for him and he is aiming to defend the league title with the Bit O' Red.
He said: "My passion is football, this is a great opportunity for me. The team has won the league and it means Champions League qualifiers this year.
"It means we have a title to defend. It has only happened 17 or 18 times where a team has defended the League of Ireland title and that is something we have to try to go and do," added Stevens.
Elsewhere, Bray Wanderers have confirmed the signing of Gary Dempsey from Waterford United. The 31-year-old midfielder had spent the 2012 season with the Airtricity First Division side but has opted to re-join the Seagulls for the forthcoming season.