Former Éire Óg Ennis manager Madden replaces Peter Keane after the Kerry native departed the role after only a year in charge of the Banner footballers.
Clare FM has reported Madden has taken the role on for a three-year term, having led Éire Óg to three Clare SFC crowns during his stint in charge of their senior footballers.
His backroom team will be confirmed at a later time.
The Banner were Munster runners-up this year, losing the provincial final to eventual All-Ireland winners Kerry.