Nagelsmann won't take up his position right away, but will be handed the reins at the Sinsheim, Baden-Württemberg-based team by interim manager Huub Stevens at the end of the season, reports Focus.
Stevens has taken up the position on a short term basis after Markus Gisdol was sacked following a string of poor results.
Speaking of the record-breaking new appointment, Hoffenheim sporting director Alexander Rosen said “Julian is still training to be a football coach at the moment.
“It was clear to us that we wanted to give the young man a chance. He's been a coach since 2006 and he fits with our way of doing things.”
“We're convinced of his quality, and by his sense of authority and quality. Julian Nagelsmann is the future, Huub Stevens is the present."
Nagelsmann is currently trainer of Hoffenheim's under-19s squad with whom he won the junior German championship last year and whom he took to this year's final of the same competition.
A serious knee injury put an end to Nagelsmann's career at the tender age of 20. But he wouldn't be the only top league coach to have never had a significant playing career.
He can look to the likes of Jose Mourinho and Arsene Wenger as examples of top level managers who never enjoyed prominence on the pitch.
Hoffenheim's new young schemer can also study the history of the Bundesliga for inspiration. In 2002 Matthias Sammer won the championship with Borussia Dortmund at the age of 34, although he had had a trophy-laden career at club and national level before that.
In Portugal meanwhile Andre Villas Boas won his first trophy with Porto at the age of 32, after joining the club's training department at the age of 16.