Bassett, who has led Norwood to back-to-back SANFL premierships in the last two seasons, has signed a two-year deal.
He has been linked with the Bombers for some time but has been in discussions with other clubs, including West Coast.
The former Adelaide defender last week revealed that he also thought "for a day" he would be an assistant coach at North Melbourne before the offer was removed. ?
"It wouldn't be a bad time for me to end up in the AFL system if I want to be an AFL coach at some stage," he told AFL.com.au's Gillette AFL Trade Radio. ??
"I'm speaking to a couple of clubs at the moment and then if someone offers you a job, you either take it or you don't."
Other applicants for the role at Essendon were made aware on Wednesday night they had not been successful.
Bassett's signing is another step in the Bombers' new-look coaching team for 2014, with Mark Thompson last week announced as senior coach while James Hird serves his 12-month suspension.
Neil Craig, who coached Bassett at Adelaide, has been appointed the club's head of coaching development and strategy.
Bassett retired in 2008 having played 210 games for the Crows.
"To work alongsidethe likes of Mark Thompson and Neil Craig is a fantastic opportunity and I can'twait to share my experience and football knowledge with this exciting group ofplayers," Bassett said in a statement released by the club.
Thompson said the 36-year-old would be a great addition to the club's coaching panel.
"Nathan comes highlyregarded, and has proven his credentials and talents as coach during his timeat Norwood in the SANFL."
"Three grand finalsand two flags in four years at Norwood footy club is a terrific effort."
Twitter: @AFL_CalTwomey
