South Korean Yang, who beat world number one Tiger Woods to claim the 2009 US PGA Championship, takes over from Japan's Joe Ozaki for the defence of the annual team title at the Dragon Lake Golf Club in Guangzhou, China from Dec. 20-22.
Ozaki had led Asia in five of the six previous editions of the eight-man event.
"I am truly honoured to undertake the leadership role of Asian team captain for the next edition of the Royal Trophy," Yang said in a statement on Tuesday.
"I am committed to building a very strong team for our continent's defence of the Royal Trophy. I will do my utmost to retain stewardship of the trophy in Asia and look forward to the matches with great excitement and anticipation."
Asia won the team event, based loosely on the Ryder Cup format, by the slightest of margins last year in Brunei, with Yang and compatriot Kim Kyung-tae prevailing in a sudden death playoff after three days of competition had finished 8-8.
Despite the loss, Olazabal has been retained as captain of Europe as they seek a fifth win in the event.