The former Mexico captain spent seven years of his playing career with the Blaugrana.
Marquez will replace Sergi Barjuan, who temporarily assumed the head coach role of the main team when Ronald Koeman was sacked last season before Xavi Hernandez's appointment.
Marquez won four La Liga titles, two UEFA Champions League trophies and the Copa del Rey among other honours during his time as a Barcelona player.
A veteran of five FIFA World Cups, Marquez was capped 147 times by the Mexico national team.
The 43-year-old will hope to follow in the footsteps of the likes of Pep Guardiola and Luis Enrique, who used the Barcelona B team as a stepping stone to greatness.
Speaking at an event in S'Agaro over the weekend, Barcelona president Joan Laporta said: "Rafa in principle had [agreed] to be the coach of Barca Atletic last year, [but] he had a situation that prevented him from doing so.
"Now this has already been resolved and Rafa will be the coach of Barca Atletic next season.
"I am especially happy because I had Rafa as a player, he is a person with a great personality, captain of the Mexican team, and who was part of one of the best Barca [teams] in history."
Barcelona's B team play in the third tier of the Spanish football pyramid.
