Ward replaces Richard Hughes, who left the position in September after just over two years in the role.
The appointment marks a second spell at Anfield for Ward, who originally joined Liverpool in 2012 as European scouting manager for Spain and Portugal.
He was promoted to assistant sporting director in 2020 before succeeding Michael Edwards two years later. Ward subsequently left the club at the end of the 2022-23 campaign.
Liverpool's owners Fenway Sports Group brought him back in 2024 as technical director, where he has spent the past two years overseeing player development pathways and the academy.
Ward said he was “incredibly excited” to take on the sporting director position again.
FSG president Mike Gordon said Ward was the “ideal candidate” given his experience within the football industry and his knowledge of Liverpool.
“The knowledge and expertise he brings will only enhance our football operations,” Gordon said.
The appointment also comes with Ward expected to provide support to head coach Andoni Iraola as Liverpool continue to develop their football structure.
Ward's return gives him responsibility for the club's football operations after already working closely with the organisation's recruitment and development departments.