The Sparks announced the move Wednesday, five days after longtime WNBA coach Brian Agler resigned.
Fisher helped the Los Angeles Lakers win five NBA titles during his 18-season playing career and served as president of the players' union. He coached the New York Knicks from 2014-2016.
"I'm excited to be the new head coach of the LA Sparks," Fisher said in a team statement. "There is no finer organization in the WNBA and I can't wait to work with our ownership group, front office, talented players and staff to cement a culture of sustained excellence, which is what LA basketball fans demand - and deserve."
The 44-year-old Fisher is being welcomed by two-time MVP Candace Parker.
"Derek is a great basketball mind who brings a ton of high-level experience to our team," Parker said. "I look forward to working with someone with championship pedigree and who has a track record of strong leadership. Derek has been a strong supporter of women's basketball for quite some time, so it's nice to officially welcome him."
Agler guided LA to the 2016 WNBA title and had an 85-51 record with the Sparks in four seasons. The team is owned by an investment group led by Magic Johnson and Mark Walter, owner of the Los Angeles Dodgers.
The Sparks will introduce Fisher at a press conference on Friday.
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