The experienced engineer has previously held the technical director role at Volkswagen during its domination of the World Rally Championship, where it scored four drivers’ and manufacturers’ titles form 2013-2016.
He then joined former VW motorsport boss Jost Capito as technical director at Williams before leaving the F1 team last year.
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Demaison's appointment at Hyundai comes after new team principal Cyril Abiteboul expressed a wish to establish a technical leader within the team earlier this year.
In his new technical director role, Demaison will liaise with research and development groups within the wider Hyundai organisation and manage the vehicle and powertrain departments for the marque’s motorsport activities - which currently include WRC, TCR and ETCR.
He will also work closely with WRC programme manager Christian Loriaux in developing the i20 N Rally1 car.
The announcement states that Demaison will play a role in determining Hyundai’s future motorsport programmes alongside Abiteboul and Hyundai Motorsport president Sean Kim.
Hyundai has this year been linked with possible expansions into other motorsport disciplines, including F1 and the World Endurance Championship.
“I am tremendously excited to start this new role with Hyundai Motorsport,” said Demaison.
“It is clear that Hyundai has fantastic potential in the motorsport realm, both in existing endeavours and also looking to future initiatives, especially electric motorsport programmes.
“My remit is to enhance and grow the capabilities of the Hyundai Motorsport operation to be one of the best globally.
“I relish this challenge and look forward to working with the personnel who have already achieved great things in WRC and their customer racing programmes.”
Abiteboul added: “After taking some time to immerse myself in the company and its activities, it became clear to me that we needed a unifying presence within our technical departments.
“Having Francois-Xavier onboard as technical director is an incredibly exciting opportunity to amplify and grow Hyundai’s motorsport programmes.
“As well as improving our current competitiveness, FX will help us to define the future of the company by bringing in improvements to our facilities to transform our capabilities to that of a top-tier motorsport organisation.
“He knows what it takes to not only win, but also dominate in motorsport, and it is that experience that we need to channel our efforts and win championship titles in the years to come.”
