The 49-year-old will look after the leadership, management and strategic direction of the professional game in England and will also work closely with men's head coach Eddie Jones.
The RFU also said https://www.englandrugby.com/news/article/nigel-melville-to-leave-rugby-football-union Nigel Melville would leave his role as director of professional rugby.
Former Ireland international fullback O'Shea, who earned 35 caps between 1993-2000, resigned as head coach of Italy earlier this month and said he was thrilled to link up with the World Cup finalists.
"I'm privileged and honoured, it's an incredible opportunity to join at a really exciting time for English rugby," O'Shea said in a statement https://www.englandrugby.com/news/article/conor-oshea-joins-rfu-as-director-of-performance-rugby on the RFU website.
O'Shea was previously the director of rugby at Harlequins, guiding the side to the Challenge Cup in his first season (2010-11) and the Premiership title in 2012.
He worked at the RFU as director of regional academies between 2005 and 2008 before joining the English Institute of Sport as national director for two years.
"There is an exciting vision at the RFU. It's not just about winning tomorrow, but also about sustaining success and winning long into the future.
"We can look forward to rejuvenating and re-energising the performance pathway to help, support and push England rugby on. As well as our relationships with all stakeholders, it's about women's rugby, Sevens, referees and coach development."
(Reporting by Shrivathsa Sridhar in Bengaluru; Editing by Alex Richardson)