Gerard's contract expires at the end of the season, and even though he guided the club to its first-ever Ligue 1 title last term, La Paillade have opted to bring in fresh blood.
Fernandez enjoyed a two-year spell at Nancy before resigning in January, and MHSC president Louis Nicollin said he is looking forward to working with his new appointment.
"I share his values. I have long wanted to work with this man because I share his values, but circumstances never allowed us to do it," Nicollin told reporters. "Jean Fernandez therefore succeeds Rene Girard head of MHSC.
"Girard has spent four years on the bench of Montpellier, getting scores largely up to our expectations.
"The highlight of the future ex-coach of Montpellier certainly was becoming the champion of France last season, after a fabulous adventure."