The former Espanyol and Deportivo La Coruna midfielder has coached with Espanyol B since retiring in 2011 and will succeed Javier Aguirre at Estadi Cornella-El Prat.
Aguirre, who took over midway through the 2012-13 campaign, left the club after leading them to a 14th-placed finish last term.
Espanyol endured a dismal end to last season, winning just one of their final 11 games, and Gonzalez - who spent three campaigns with the club as a player - will be expected to improve on Aguirre's performance next term.
Sporting director Oscar Perarnau said: "We love the personality (Gonzalez has) and the proposed game he wants to play.
"We believe fully in (his) ability."
Gonzalez was part of the Espanyol team that won the 2000 Copa del Rey, scoring the decisive goal in their 2-1 final victory over Atletico Madrid.
‘So many times when we played Manchester United, arguments would start before the first whistle had even blown – the players would try to kill each other with their eyes’ Former Arsenal star remembers famous Premier League rivalry
Bizarre Jose Mourinho statement aims to pre-empt punishment after Fenerbahce boss clashes with Galatasaray counterpart
