Paykan parted company with Majid Jalali by mutual consent last week.
Jalali left the Tehran-based football team following the poor results with the team.
Paykan suffered six successive defeat in IPL.
Faraki is without a team since parting ways with Saipa in May 2017.
He has won two IPL titles with Foolad and Sepahan in 2014 and 2015.
Paykan sits 9th in the table with 16 points, 15 points adrift of leader Padideh.