The move will mark the end of a successful career for Servat who fought back from a serious back injury to be regarded as one of the best in the world in the later years of his career.
In an eight-year international career Servat has so far won 44 caps, winning two Grand Slams as well as being part of the French side which came agonisingly close in last year's World Cup final against New Zealand.
Widely expected to join big-spending Toulon at the end of the season, Servat will instead work under long-time head coach Guy Novès for the four-time European champions.
He said: "I arrived here [at Toulouse] in the age groups, it's my home and I feel good here.
"I've just turned 34. It's good to choose when you stop. It's in keeping with my career.
"I'm delighted with the confidence placed in me by Guy [Novès] and the President [René Bouscatel].
"The contacts with Toulon were quite advanced, but I spoke to Bernard Laporte on the phone, there was no problem.
"Yannick Bru is an example for me of someone who succeeded in their transition from player to coach.
"I'd always hoped to go into coaching in my head."