Ferrara returns as Italy Under-21 coach
"In the coming hours his contract will be sorted out and it will run until 2013," an Italian federation statement said on Friday.
Casiraghi left by mutual consent on Wednesday after last week's playoff defeat by Belarus which meant Italy missed out on next year's European Championship and the London 2012 Olympics.
Ferrara was sacked by Juve in January after a woeful half-season in charge. It was his first top-flight coaching job after he previously worked as Italy assistant manager and Juve youth head.
The former Italy and Juve defender will be assisted in his new job by former Azzurri goalkeeper Angelo Peruzzi and has a challenge on his hands given the country is strugglig to produce good young players.
Their World Cup flop as holders led to the federation drafting in Roberto Baggio as technical director and Arrigo Sacchi as head of youth development.