Morris and fellow assistant Jim Dymock were appointed caretakers when Flanagan was sensationally de-registered by the NRL for dealing with the club while suspended in 2014.
It remains unclear whether Flanagan will appeal the ban, however the Sharks opted to give Morris the nod before the pre-season recommences on Monday.
Sharks chief executive Barry Russell and the club board began discussions on handing the reins to Morris prior to Christmas, before informing senior players on Thursday.
"Ultimately you need to have one voice and one person in charge as a head coach," Russell told AAP.
"I rang all those guys yesterday to let them know. I think everyone was in agreeance, we needed one boss."
Late last month, Dymock hit out at suggestions he was satisfied as being a career assistant and openly declared his ambition to become a head coach.
However the Sharks instead went with Morris, who has been a part of the club's set-up since playing the final five years of his career in the Shire.
Dymock will remain as an assistant.
After completing his coaching education, he became the club's elite development coach in 2015 and fast-tracked into their under-20s mentor role the following season.
It was there when, armed with promising talents Sione Katoa, Jesse Ramien and Kyle Flanagan, that Morris claimed coach of the year honours with the minor premiership.
He became Flanagan's assistant last year.
"The club is delighted to be able to give John the opportunity to step up into the Interim head coach role and has full confidence in his ability to lead our football program into the 2019 season," Russell said.
Flanagan has until the end of January to appeal his ban.