During 2017, McGhee has left his role as Motherwell manager and as assistant for Scotland after the departure of Gordon Strachan, but the experienced boss has secured a return to English football with the Bees.
A club statement read: "Rossi felt that now was the right time to take a step back from his position with the first team to allow someone of Mark's profile to bring his experience to the role.
"Rossi will work with and oversee all players throughout the Academy up to U23 and be a key part of the technical board to help ensure there is a clear player pathway to the first team. Alex Armstrong will continue in his role as assistant to Mark at the club."
Since 2006, McGhee has had just one role in England, with that coming in 2012 when he won just 12 of his 45 games in charge of Bristol Rovers.
The 60-year-old joins Barnet with the club sitting in 23rd place in the League Two table.