The 43-yearold, who won ten caps for Wales and one as captain in 1997 against Canada, started his playing career in 1988 with Cardiff before moving to Sardis Road to play for Pontypridd three years later.
He formed a legendary partnership at half back with Neil Jenkins before his retirement in 2005 when he moved into a coaching role with Pontypridd, later guiding them to two SWALEC Cup victories.
John became a full-time coach with Wales Sevens in 2009 and guided them to Rugby Sevens World Cup glory in Dubai that year.
He has been instrumental in bringing a number of players from Sevens through to full honours with Wales, with Alex Cuthbert, Rhys Patchell and Lloyd Williams among those that have taken the step up after performing in the IRB Sevens World Series.
Director of Rugby Phil Davies said: "We conducted an extensive worldwide search for our new Backs Coach and had some outstanding candidates. However, we had a person on our doorstep that was the perfect fit, an international coach who led Wales to World Cup success.
"Paul has done a truly fantastic job at Pontypridd. He has built great relationships and been a real mentor for young players with his skill development. The young backs that we have at Blues will benefit from those qualities and he will develop them.
"We are delighted that he has come on board and he will be a real asset to the Blues. Our thanks go to the WRU and Pontypridd for their support and understanding in this matter.
"Paul will continue his work with Pontypridd and we are very grateful that we've been able to now secure the services of both him and Chief (Dale McIntosh) in recent months."
Paul John said he was thrilled to take the next step in his career and join the region.
He added: "The last six years working at the WRU have been the most challenging and rewarding of my rugby career. It's been a brilliant environment to be part of and all members of the Wales Sevens management team have been a particular joy to work with.
"For that reason, I certainly wasn't looking to leaveand it has been a very difficult decision to make. However, I know Phil Davies and obviously worked closely with Dale McIntosh for a very long time, which has made the option more of a realistic possibility.
"Coaching the Blues will certainly be a challenge but on reflection it was a decision I felt I could live to regret if I didn't make the move."
John will continue to head up the coaching team with Principality Premiership champions Pontypridd.
"Having discussed the situation with Phil Davies and my family, and without the Wales Sevens related travel, I feel I will have time to devote to both jobs and that actually they will complement each other.
"I'm leaving the Wales Sevens set-up in great hands with Gareth Williams taking interim charge of the side, ably assisted by team manager David Jenkins and conditioner Wayne Proctor and the current squad is in excellent shape for the rest of the season."
WRU National Performance Manager Gethin Watts said, "We wish Paul John all the very best in his new role with Cardiff Blues. Paul has played a hugely important role in raising the profile and importance of sevens rugby in Wales since taking over as Wales Sevens head coach and as a full time coach with the WRU's National Academy.
"He led Wales to a historic Rugby World Cup Sevens win in 2009, and importantly, utilised that success for the good of the game in Wales."