The 54-year-old, who signed a two-year contract on Wednesday, takes over from Dutchman Mart Nooij who was relieved of the post last month.
Engels has been appointed to ensure that the Mambas have a substantive coach ahead of the start of the 2014 World Cup qualifiers.
Mozambique begin their qualifying campaign against the Comoros Islands in November when they play a preliminary-round tie over two legs in five days.
They beat the same opponents 3-0 at home last weekend at the end of their unsuccessful African Nations Cup qualifying bid.
Engels is a former Borussia Moenchengladbach player, with previous coaching experience in Japan, where he was as an assistant at Urawa Red Diamonds.