Savage, 36, left Deepdale last week and will take up his new appointment from January 4.
He joined North End in July 2017, linking-up with Alex Neil after working with him previously at Norwich City and Hamilton Academical.
PNE will look to replace Savage's position with a chief scout.
Hearts are currently top of the Scottish Championship as they look to bounce back straight away to the Premiership after relegation in the summer.
Savage told the Jambos official website: "Hearts is such a massive club with fantastic facilities and truly unbelievable backing from fans and sponsors.
"We have everything we need to quickly get back to where we belong.
"I am delighted to be coming back to Scotland. I look forward to putting the experience I have gained over my time down south and the network of contacts I have built to the best possible use at Hearts. I can’t wait to get started."
Hearts manager Robbie Neilson said: “I am really looking forward to working with Joe in the upcoming window and beyond.
"It is no secret we have been looking for the right person for this role for some time.
“I have been closely involved with the selection process and I am really confident that Joe and I will work well together.
"He has great experience and contacts across Europe and beyond. I believe he will be a great asset to the club.”
Thanks for reading. If you value what we do and are able to support us, a digital subscription is just £1 per month for the first two months. Try us today by clicking here