Allan's appointment to the post was sealed after a unanimous vote at the club's December board meeting.
"Ben has made a unique and significant contribution to the Fremantle Football Club as a player, coach, board member and now vice-president of the club," president Rick Hart said.
"I look forward to working closely with Ben as the club strives for sustained on-field success."
Allan, 40, played 47 matches for Fremantle between 1995 and 1997 as well as 98 for Hawthorn between 1990 and 1994.
He coached Fremantle to two wins from 13 matches in 2001 after the mid-season sacking of Damian Drum.
"Being vice-president of the Fremantle Football Club is a big responsibility and one that I take very seriously," Allan said.
"I was humbled by the support of my fellow board members and I see it as a privilege to take on the role.
"It will certainly be a challenge to emulate the fantastic work done by former vice-president Mel Ashton but it is a challenge I am very much looking forward to."
