Rutten, who was sacked by the Bombers late in the 2022 season after 44 games as head coach, is leaving his current role as a Richmond assistant.
He moves to Port to replace Chris Davies, who quit last month to become Carlton's football boss.
The 42-year-old Rutten is the latest appointment in Port's shake-up of off-field roles under new head coach Josh Carr, who has taken over from Ken Hinkley.
The Power have lured ex-Gold Coast coach and Brisbane assistant Stuart Dew as Carr's senior assistant among other appointments, including Hawthorn identity Andy Collins as coaching director.
Carr's assistant coaching group will also feature newcomers Luke Webster, who has transferred from a similar role at Fremantle, and Darren Reeves, a dual premiership coach with SANFL powerhouse  Glenelg.
Former Port players Hamish Hartlett (assistant coach) and Jacob Surjan (development coach and Port's SANFL coach) have also been appointed in the off-season.
Rutten had a distinguished 229-game playing career for Port's arch enemy Adelaide from 2003 to 2014 before moving into coaching.
"Starting a new journey with a new coaching group and plenty of new staff, it's an exciting opportunity to grow together and build something special," Rutten said.
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