The 42-year-old former Toffees striker made a dramatic return to the club, initially on a voluntary basis, in late 2011 after spending five years in retirement in Majorca.
During that time he has not spoken to then Everton manager David Moyes since leaving the club in the summer of 2006.
Ferguson had not taken kindly to Moyes' decision not to award him a new contract at the end of that season, a decision which effectively ended his playing career.
However, the striker grew to regret the way his relationship with Moyes had turned sour and returned to Finch Farm in order to apologise.
Moyes accepted his apology and gave him the chance to work with Everton's young players alongside Alan Irvine and Kevin Sheedy.
That turned into a permanent position, with Ferguson relishing the opportunity to coach some of the club's potential future stars.
He subsequently gained his UEFA 'B' and 'A' licences and is currently working towards achieving his UEFA pro licence.
His work with the Under-18s appears to have made a positive impact as he will now begin a new role as first-team coach from next week.
Liverpool Echo reporter Gregg O'Keefe posted on Twitter that he did not believe the move was linked to any approach by Swansea for assistant Graeme Jones and that Ferguson would work alongside him and boss Roberto Martinez.
The promotion does give rise to the possibility that one day Ferguson could become manager of Everton. The Scot is something of a hero for blues of a certain age - this writer included - so that prospect is certainly an exciting one.
Despite his fearsome on-field reputation Ferguson always had a softer side rarely seen by those outside the club, aided of course by his infamous refusal to speak to the media after he was jailed for an on-field headbutt as a Rangers player in 1994.
That calmer side to his character has clearly helped his development as a coach (this Express article gives an interesting glimpse into the way he works), though I'm sure he is also capable of dishing out the odd rollicking when required!
All in all I think it is a great move by the club, Ferguson loves the Blues and it is comforting to know that someone who cares for Everton as much as the fans do will be at the heart of the dressing room.
What do you think of the big man's promotion? Have your say below.