Ralf Rangnick will take charge until the end of the season, with an agreement in place that he will continue in a consultancy role for a further two years.
"He was our number one candidate for interim manager, reflecting the invaluable leadership and technical skills he will bring from almost four decades of experience in management and coaching," said United football director John Murtough.
Upon completing the move from Lokomotiv Moscow, Rangnick said: “I am excited to be joining Manchester United and focused on making this a successful season for the club.
“The squad is full of talent and has a great balance of youth and experience. All my efforts for the next six months will be on helping these players fulfil their potential, both individually and, most importantly, as a team.
“Beyond that, I look forward to supporting the club’s longer-term goals on a consultancy basis.”