Lambert was Huska's assistant coach for last five seasons. Huska departed to take a job as coach of Calgary's American Hockey League affiliate in Glens Fall, N.Y.
Lambert is a former defenceman who played 29 games for the NHL's Quebec Nordiques. He spent several seasons in minor pro and the German leagues before retiring in 2009.
The 44-year-old from St. Boniface, Man., won a Memorial Cup playing for the Swift Current Broncos in 1989.
Lambert will be Kelowna's eighth head coach after Huska held the job for seven seasons. The Rockets set a franchise record for wins in 2013-14 with 57 and posted the Western Hockey League's best record.
"This is an opportunity Ryan has deserved for many years," Rockets president Bruce Hamilton said Monday in a statement. "He's done a wonderful job for us and we will be his biggest fans.”
"We wanted to hire someone who would be capable of taking over when Ryan's term came to an end. I couldn't be happier or more satisfied that Dan is fully prepared to be our head coach."