The Frenchman replaces Vahid Halilhodzic who resigned following the Fennec Foxes' successful World Cup campaign which saw them reach the round of 16 in Brazil.
Those heroics led to many, including the Algerian president, to encourage the Bosnian to stay in his post but the 61-year-old decided to join Turkish side Trabzonspor upon the expiration of his contract.
And Algeria have wasted no time in moving for Gourcuff, whose deal runs until the 2018 World Cup in Russia.
"The Federal Bureau (have) decided to appoint Mr Christian Gourcuff as national coach from 1 August 2014,'' read a statement on the FAF's website. "A goal for the coming African Cup of Nations in 2015 and 2017 and the 2018 World Cup will be implemented.
"Mr Gourcuff will also participate in the training and development of the National Technical Department.''
Gourcuff left Lorient at the end of last season after 25 years at the helm over three spells and has also managed Le Mans, Pont L'Abbe, Rennes and Al-Ittihad.