Guareschi, who has spent the past four years in his Ducati role since ending his stint as the manufacturer's test rider, made the announcement on Saturday at Motegi.
Rossi's VR46 squad will compete under the Team Sky name after striking a title sponsorship deal with the Italian arm of the TV network.
A statement from the squad read: "Vitto Guareschi will assume the role of team manager for the Sky squad, which will next year begin racing KTM motorcycles for the Moto3 World Championship.
"Guareschi will be tasked with guiding a group of top Italian young riders, including Romano Fenati."
No replacement for Guareschi has been named by Ducati, although its former World Superbike team chief Davide Tardozzi has been linked to the role.