Hesson led New Zealand to the 50-over World Cup final in 2015 during his six-year spell as head coach and has also coached Kenya and Indian Premier League franchise Royal Challengers Bengaluru.
The 50-year-old is currently the head coach of Pakistan Super League defending champions Islamabad United.
"Mike brings with him a wealth of international experience and a proven track record of developing competitive sides," PCB chairman Mohsin Naqvi said in a statement.
"We look forward to his expertise and leadership in shaping the future of Pakistan’s white-ball cricket."
Hesson takes over from Aqib Javed, who was appointed on an interim basis in November, a month after Gary Kirsten resigned, barely six months after taking the job.
Javed, who also took over as Pakistan's interim red-ball coach after Jason Gillespie resigned in December, has been appointed as director of high performance, the PCB said.
It did not provide details on who would take over as test coach on a full-time basis.
Pakistan will host Bangladesh in five T20 Internationals later this month.
