The 52-year-old is returning to Formula 1 from his position as technical boss of Audi's World Endurance Championship programme, which ends this season.
Swiss Zander previously worked for Sauber between 2006 and 2007, and has held senior design positions in a number of other F1 teams.
His most recent F1 role was as deputy technical director of the title-winning Brawn team in 2009.
He also previously worked for Honda, Williams and BAR.
Sauber have faced financial problems in recent years and are currently last of the 11 teams in this year's world championship.
But the Swiss team have hopes of moving up the grid next season following their takeover earlier this year by a Swiss finance group called Longbow.
Zander said: "One of my tasks will be to define a stable and efficient technical organisation that evolves the potential of creativity and, therefore, the basis for the development of successful Formula 1 cars.
"Initially we obviously want to improve and establish ourselves as a team in the mid-field. It is a challenge which I await with excitement and enthusiasm."
Team principal Monisha Kaltenborn said: "This is a very important step in order to guide the team into a new and successful era.
"Zander fits well into our team. He has a lot of know-how in Formula 1, as well as in motorsport in general.
"In our factory in Hinwil, he will have the possibilities to work technically at a very high level. We are convinced we will make progress with him."
Zander joined Audi in 2010 and led the team to five consecutive wins in the Le Mans 24 Hours from 2010-14.
Sauber have appointed Jorg Zander as their new technical director.