The retired midfielder, who scored 120 goals in 504 Premier League appearances during an illustrious playing career at Anfield, took a role at the club’s Academy in January this year, and will replace Neil Critchley, who will take charge of their Premier League 2 team.
Gerrard told liverpoolfc.com: "One of the things Jurgen said to me when I sat down with him [was], 'You'll make mistakes, you've got to learn from them, grow and move on - and you ideally want to do that away from cameras.'
"I think he was more excited than me as the chats progressed and, when he thought about me coming back and being manager of the 18s, he was super excited. He's been first-class."
The Reds are currently fifth in Division 1 of the final stage in the 2016/17 Under-18 Premier League campaign, and they host Chelsea at the Liverpool Academy in their next match on Saturday.