Busacca will also join FIFA's Task Force, headed by Franz Beckenbauer, which is looking at ways of making the game more attractive, football's governing body said in a statement.
The 42-year-old took charge of last season's Champions League round-of-sixteen tie between Barcelona and Arsenal when he infuriated the Premier League side by sending off Robin van Persie and was involved in an angry clash with Arsene Wenger afterwards.
He was also involved in controversy at the last World Cup when he awarded Uruguay a penalty for an alleged foul on Luis Suarez, who fell theatrically, and sent off South Africa's goalkeeper Itumeleng Khune in the same incident.
Uruguay, leading 1-0 at the time, went on to win 3-0 to leave South Africa coach Carlos Alberto Parreira fuming.
Busacca's other stormy moment was in 2009 when he was banned for three matches after making an insulting gesture with his finger at Young Boys Berne supporters who were barracking him during a Swiss Cup match.
Busacca's international career spanned 12 years, including Euro 2008 and the UEFA Cup final in 2007. He refereed more than 250 Swiss League matches.
"As I have said on many occasions, I have made refereeing one of my main priorities," said FIFA President Sepp Blatter.
"Massimo Busacca's experience will prove to be particularly useful to our mission and to our efforts to continue the groundwork we have put in place with the confederations and member associations in this particularly important area."
Busacca will work on the administration and development of refereeing, implement decisions taken by FIFA's referees committee, carry out tasks related to the logistics of refereeing and organise courses.
He will report to the referee's committee.
"I now intend to pass my knowledge on to my refereeing colleagues to ensure that refereeing continues to improve and to help it to prepare better for the future.
"This is something that I am very passionate about, and it is a role that I have accepted with great pride and pleasure."
