"I'm very happy that I will have a role with Zamalek after my retirement," the towering striker told FilGoal.com on Saturday.
"The club's board members asked me to accept their offer of becoming an assistant coach, especially that I have a very good relationship with all players.
"I felt that I could play for one more season but I finally decided to serve Zamalek as an assistant to (Swiss coach) Mr. Michel Decastel."
Ali will succeed Sami Al-Sheshini, who left Zamalek to work as an assistant for Gouna coach Ismail Youssef.
The 36-year-old, who joined Zamalek in 1999, spent ten fruitful years with the White Knights to become their all-time top scorer with 130 goals in all competitions.
He failed to hit top form during the past few years though, drawing criticism for wasting many clear-cut opportunities.