Williams, aged 34, played for Saints for two seasons until he retired at the end of last season.
He arrived at Franklin’s Gardens ahead of the 2002/03 season just months after playing against, and beating, Saints in the Powergen Cup for London Irish.
However, his start date at Northampton Saints was slightly delayed after he was unexpectedly called up to play for Wales on their tour to South Africa.
The father-of-two, who remained living in Northampton after leaving Saints and coached Coventry for a season, played 26 games for the club.
Head coach Budge Pountney said: “Steve has had a great year with Coventry and will bring a vast amount of playing and coaching experience with him. He will be a great addition to the coaching set-up and we cannot wait to start working with him again”
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