The struggling Championship club said in a statement that the 35-year-old had signed a two-and-a-half-year contract.
Rooney, who scored an all-time record 53 goals for England and is also Manchester United’s record scorer, joined Derby in a player-coach capacity a year ago from MLS side DC United and made 35 appearances for the club.
Rooney began his playing career with boyhood club Everton, scoring his first goal in spectacular fashion as a 16-year-old against Arsenal.
He became one of the country’s most iconic players, scoring 253 goals for United and winning five league titles and the Champions League. Rooney is also England’s most capped outfield player, with 120 international appearances.
“When I first arrived back in the UK I was completely blown away by the potential of Derby County,” Rooney said.
“Despite other offers I knew instinctively Derby County was the place for me.”
Rooney follows Chelsea’s record goalscorer Frank Lampard in managing Derby. Although unlike Lampard who was close to taking the Midlands club up in 2019, his task will be to stop them falling in to the third tier after a poor season.
Derby are third from bottom although under Rooney’s interim watch they have improved, losing only two of their last nine league matches, registering five clean sheets.
“We are delighted to confirm the appointment of Wayne Rooney as our new manager,” Derby’s CEO Stephen Pearce said.
“Our recent upturn in results under Wayne was married together with some positive performances, notably the 2-0 home win over Swansea City and the 4-0 victory at Birmingham City.
“Those foundations have provided a platform for the club to build on in the second half of the season under Wayne’s guidance.”
Rooney, who made more than 700 professional appearances during his career, said he would leave “no stone unturned” in trying to bring the good times back to Derby and he received backing from his first manager at Everton, David Moyes.
“He has had an incredible career and he’s chosen to stop playing and I’m sure that’s for the right reasons,” Moyes, now West Ham United manager, told reporters on Friday.
“It’s a different world, the best players don’t always make the best managers but Wayne’s love of the game and his drive will give him every chance of being successful.”