Durham, nicknamed the Citizens, play in the Northern Football League Division One.
Bernard was forced to hang up his boots in 2007 when chronic hip injuries ended his career.
Previously the Frenchman had played for Lyon, Southampton and Rangers as well as a loan spell at Darlington back in 2001.
The former Newcastle defender told the Northern Echo, ”I want to make Durham one of the best feeder clubs in the North-East. At the moment, I don’t think the area develops enough youngsters.”
Olivier Bernard had appointed himself chairman of Durham City.
This is the first time Bernard has got involved in the management side of running a football club.