The 45-year-old, who took over Ray Wilkins' coaching job when the former England midfielder left the club in November, will oversee a scouting network and youth development programmes, as well as supporting new manager Andre Villas-Boas.
A statement on Chelsea's website read: "Michael takes on a vital role that will assist the overall long-term football strategy of the club."
Emenalo was a surprise choice to succeed Wilkins in November because of his lack of experience at the highest level.
A former Nigeria international, he was brought to the club in a scouting position in 2007 when Avram Grant was in charge.
Villas-Boas could find no place for him in his coaching set-up, though, and he has now been given the sporting director job.
He told the club's official website: "Without delving too deeply into it, the first thing is that I'm going to be supporting the manager and working with him in making sure that things run smoothly.
"I have the responsibility to direct and manage our scouting structure internationally and domestically, and to keep an eye on and assist the progress of the academy. That's the simple summation.
"Over the next weeks and months I will be getting the scouts in place, finding the people that will lead the scouts along with me, and integrating the agendas and ideas of the different areas from the first team to the academy. After that it will hopefully be a question of reviewing our efforts and making sure it is bearing the fruits that we expect.
"The final decisions about who comes in and who doesn't will be the manager's to make but to arrive at that stage there will be a lot of working together and I would imagine I will be part of that process of working together to make that happen."
Chelsea have also promoted Dermot Drummy from youth-team to reserve manager, with Adrian Viveash taking his place in his previous position.
Source: Team Talk
Source: Team Talk