Captain Tom Westley, spinner Simon Harmer, pace bowlers Jamie Porter and Sam Cook, batsman Nick Browne and all-rounder Paul Walter remain at Essex from the squad who won the title under Silverwood in 2017, having been promoted the previous year.
His first game in charge next summer will be a home Championship game against Surrey, title winners for the last three years, starting on 4 April.
“We were clear throughout that we were focused on making the right decision, not just a quick one, and following this process, we firmly believe we have stuck to that and appointed the best candidate,” said Cricket Committee chair Jason Gallian.
“Having spoken to Chris, I know how motivated he is to make his mark in the coming years, and his desire is as high as ever to take on the role of director of cricket and lead on the strategic side.”
Essex did the Championship/T20 Blast double in 2019 and added the Bob Willis Trophy the following year, but have not won anything since then.
They finished fourth in the Championship this summer and failed to reach the knockout stage in either the 20 or 50-over white-ball competitions.
Former pace bowler Silverwood took 577 first-class wickets during his playing career, which included spells with home county Yorkshire and Middlesex, and he played six Tests between 1996 and 2002 and seven one-day internationals.
He first joined Essex as bowling coach in 2010 and was promoted to head coach in December 2015, succeeding Paul Grayson.
“People quite rightly focus on the success around 2016-2017 but they forget that Chris was here for a number of years before doing a lot of work in the second eleven,” general manager Dan Feist told BBC Essex.
“He identified Jamie Porter and worked with him on his skills and Sam Cook, when he was coming up through the pathway, so he knows what that looks like.
“He’s got two of his own boys in the pathway at the moment so he’s really bought into that opportunity.”
“He’s really keen to get his teeth not only into coaching the side and making sure the first team stay competitive but also looking at that longer-term picture that ties into the way the game is changing and adapting to that, helping us stay competitive over the next five, 10, 15 years with players coming through, both for the men’s team and the women’s team, we’ve always had that success of producing players right through the programme,” added Feist.
