The former Glasgow Rangers coach replaces Danny Searle, who left the club on Monday after a winless start to the new season.
The 34-year-old, who has also held the position of first-team coach at Championship side QPR, takes over in time for Saturday’s match against Hartlepool United.
Working alongside Watling in the dugout will be assistant manager David Kerslake and coach John Cotton.
The Kent club sit bottom of the National League table, taking just two points from their eight matches.
New Fleet boss Watling said: “I’m delighted to be here. It’s a brilliant setup at Ebbsfleet and it was really important to align myself with a club that allows me to play football on the front foot and the way I want to play it.
“I want to develop people here, and what I saw on the pitch on Tuesday night, I loved the commitment, the honesty and work rate, and the quality on show.
“It was a marker for the bare minimum I want to see and now myself, David and John can’t wait to get started in front of the Fleet fans on home soil against Hartlepool on Saturday.”