The Auckland native, who won two Top 14 titles in France with Clermont and a Super crown with the Blues to break a 21-year drought, will be the first man to coach an Australian club after a New Zealand one.
He arrives on the cusp of a home World Cup, replacing the new Wallabies coach Les Kiss at Ballymore where he senses "underlying frustration" after years of quarter-final exits and finishes outside the top-four.
Cotter's Blues were brutal in defence and at the set piece on the way to the 2024 title.
But, like the rest of the field, they were no match for the rampant Hurricanes this year, who attacked brilliantly to claim the crown.
Cotter watched Sunday's Brisbane club finals at Ballymore and has seen enough to think he can find an extra few per cent in the Reds to challenge them.
"In a one-off game the talent's here to become competitive with other teams but you need to do that all season ... rock and roll through the tough games and get points and get yourself in a situation," Cotter, who has also coached the Scottish and Fiji national teams, said.
"You can get better quicker here than you can in other places. I coached in Scotland with horizontal rain at Murrayfield and you couldn't get anything done, nothing constructive.
"Players here embrace physicality, which is music to my ears, and there's a skill set developed to move the ball from one side to the other.
"We've got a fan base as well. The rugby's got to be reasonably attractive, but you don't get points for artistic display. You've got to be effective and and win games."
Cotter, who has brought Blues defence coach Craig McGrath to Brisbane, hopes his unprecedented trans-Tasman move can unlock a new level and have spin-offs for the Wallabies.
Asked what set New Zealand players apart, the 64-year-old said: "Physically, their speed into collision and power into collision, and we know how big they are."
"So it's bridging the gap in there," Cotter said.
"There's potential to get more physical, to get fast, more robust. We want to bridge the gap. We want to beat those teams."
Cotter's first assignment will be a Super Rugby Aust pre-season clash with the Western Force on September 12.
Flyhalf Tom Lynagh, who played just 18 minutes last season due to injuries, has returned to full training and should see game time against the Force.
"He's a great little player and trained really well last week," Cotter said of the seven-Test Wallaby, who started against the British and Irish Lions.
"I was impressed with him. We had a good conversation around how he runs a game."
Lynagh's injury-riddled season meant he and current Wallabies No.10 Carter Gordon never fought for the jersey last season.
Cotter will likely need to recruit another playmaker though, given Australian under-20s star Finn Mackay's anterior cruciate ligament tear will keep him out all season and Ben Volavola will head to the Fijian Drua after the Super Rugby Aust campaign with the Reds.
