Daryl Gibson has vowed never to let the Waratahs drift back to the "arrogance" of years gone by after helping Michael Cheika rebuild Australian rugby's underachievers from the ground up.

After three years as the yin to Cheika's singular yang at Moore Park, Gibson became the first foreigner appointed as head coach at the Waratahs in a three-year deal announced on Thursday.

He will take over from Cheika at the end of the Super Rugby season when the Super Rugby and Heineken Cup-winning coach narrows his focus to the Wallabies. Gibson said his No.1 priority was securing a roster for next season and, within that, retaining marquee players Israel Folau and Kurtley Beale.

He also said repeated finals appearances should be standard for the largest province in Australia.

"Where I want to take the club is retain our status as a premier club firstly in Australia, but also in Super Rugby," Gibson said.

"We've worked hard in the last two or three years to drive and transform ourselves into perennial contenders and it's certainly my goal to ensure we retain that status and compete every year for trophies.

"While some people think that's arrogant, I believe because of our position in Australian rugby and the fact that we sit on the largest talent base, that should not be unachievable."

The Waratahs have played in three finals since the advent of Super Rugby in 1996 and won the title only once, two seasons into Cheika's reign.

Gibson said building a "talent pathway" was one of the most important achievements of the province's current coaching set up, which also includes influential defence coach Nathan Grey.

"That's the critical thing we've taken some real strides towards - getting our youth structures together and starting to produce the pathway and talent that I think in the past the organisation has been guilty of being a little bit arrogant around and not putting the necessary foundations in place for our team to be continually challenging and being a top-four team in Super Rugby," he said.

"Over the last two years we've established some really nice structures, regained our pathways, and the fruit of that labour will be seen in coming years, particularly in 2017, 2018, when a lot of those young players we've nurtured through our pathways will become Waratahs and lead our organisation in the future."

That nursery could be tested sooner than expected after promising young rugby league convert Sam Lousi was ruled out of the rest of the season with a cracked shoulder blade. Southern Districts second-rower Jed Holloway is one option Cheika may look at to replace Lousi, along with starting Mitchell Chapman or moving Jacques Potgieter to the second row.

A 19-Test All Black, Gibson was an assistant to Robbie Deans at the Crusaders and was suggested to Cheika by Deans when the former Leinster coach arrived in Sydney at the end of 2012.

"Whilst this is Daryl's first head coaching appointment, he has played under - and coached with - several highly credentialled coaches, including Wayne Smith, Steve Hansen, Todd Blackadder and Robbie Deans," Waratahs chief executive Greg Harris said.

"He brings an incredible wealth of football knowledge and experience to the position and is very much a values and culture-driven coach - which is what the selection panel was also very impressed with."