The 50-year-old former rugby league player guided Wasps to four English Premiership titles, a Heineken Cup and European Challenge Cup as head coach, before helping Wales win three Six Nations titles, including two Grand Slams, working alongside head coach Warren Gatland since 2008.
Edwards will now work with Richard Hodges in helping to improve Cardiff's defensive standards in the upcoming campaign.
Head coach Danny Wilson said on the Pro14 website: "Shaun will be a great addition to Cardiff Blues. His record speaks for itself and I am sure he will have a big impact.
"Defense is an area we have to improve if we want to take the next step and qualify for the European Champions Cup.
"Shaun has an invaluable wealth of experience, which will be hugely beneficial, and will play an important role in developing the defensive coaches and leaders of the future. I would also like to thank the Welsh Rugby Union for their support in this appointment."
Edwards added: "I'm really looking forward to working with Danny Wilson and Cardiff Blues. There's a lot of potential here.
"For the majority of my time with Wales, Richard Hodges has also been the defense coach for Wales U20s so it will be great to link-up with him again."