"We are excited to welcome Manny to the Cubs' organization and look forward to him working with our young hitters," said Cubs president of baseball operations Theo Epstein, who previously worked with Ramirez for seven seasons while both were with the Boston Red Sox.
"While Manny is not and will not be a fit on the Cubs' Major League roster, we do think at this stage of his life he's a nice fit as a mentor for some of the young, talented hitters we have in the organization.
"Manny will coach full-time and play part-time in a limited role that does not take at-bats away from our prospects. If he shows there is still some magic in his bat, perhaps he will find his way back to the Major Leagues and help another team, but that is not why he is here.
"We are thrilled that he wants to work with our young hitters and make a difference."
Ramirez last played in the Major Leagues with the Tampa Bay Rays in 2011. He signed a Minor League contract with the Texas Rangers on July 5, but he was released six weeks later.
Ramirez had a batting average of .312 with 2,574 hits, 555 homers and 1,831 RBIs in a Major League career that spanned 2,302 games and 19 seasons.
In 2009, Ramirez was suspended 50 games for violating Major League Baseball's drug policy. In 2011, a second violation drew a 100-game suspension. Ramirez chose to retire rather than serve the suspension. In September 2011, Ramirez sought reinstatement and accepted a 50-game suspension.
Ramirez will report to the Cubs' year-round training base in Mesa, Ariz., for extended spring training before joining Iowa.
"I'm at the stage of my life and career where I really want to give something back to the game I love," said Ramirez. "The game has meant a lot to me and done so much for my family.
"I know I am nearing the end of my playing days, but I have a lot of knowledge to pass on to the next generation, both what to do and what not to do. While I would love to return to the Major Leagues, I leave that in God's hands. My focus will be working with the young hitters, making sure they don't make the same mistakes I made and helping the team any way I can."