Harding played 141 games and kicked 157 goals in 10 seasons with the Kangaroos.
Harding retired at the end of 2010 and was a playing assistant coach with VFL side Werribee for the following two seasons.
Lions football operations manager Dean Warren said Harding would also coach the Lions' reserves team.
He said the former Kangaroo understood the intricacies of the modern game and could relate to the challenges facing the Lions' playing group.
"He's learned directly from some quality AFL senior coaches in Denis Pagan, Dean Laidley and Brad Scott, and is now determined to forge his own path," Warren said.
"Leigh will take the reins of the Lions reserves side, and will work closely with Gary O'Donnell in developing our younger players."
Harding effectively replaces the position left vacant by development and reserves coach Nathan Clarke, who departed the club last month to pursue other business interests.
