Ferguson had been part of the coaching set up at the Toffees since 2014 and has twice served as caretaker manager.
TheScotsman worked under seven different managers at the club, including Roberto Martinez, Ronald Koeman, Sam Allardyce, Marco Silva, Carlo Ancelotti, Rafael Benitez and Lampard.
Everton endured a difficult 2021/2022 season; only retaining their top flight status in their penultimate game of the campaign. They eventually finished in 16th position.
"It's been a massive decision for me. An incredibly difficult one but I need to move on, to take that next step in my career and look for that new challenge. Being a caretaker manager has given me confidence to step into management," he told Everton's official website.
"It was difficult last season but this club is definitely heading in the right direction. It's a fantastic club.
"The team is in good hands with Frank as manager. He's been first class and he wanted me to stay on. I'll be there as a supporter. My kids have got season tickets and I'll be looking forward to coming back."
Ferguson had two spells as an Everton player, scoring 73 goals in 273 appearances.