Pete Wild had been installed as manager on an interim basis following the sacking on Frankie Bunn on December 27, and masterminded a 2-1 victory away at Premier League Fulham in the FA Cup third round.
But Scholes has now been cleared to take charge of Oldham and his first game in charge will come at home to Yeovil Town on Tuesday.
Scholes, 44, is taking on his first managerial role, signing a contract with the club he supported as a boy after spending his entire playing career at Old Trafford.More news: Trump Supporters Form Human ‘Wall’ Along U.S.-Mexico Border
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Salford, expectedly, will join League Two (where Oldham plays) next season and there were initial fears of conflict of interests.
The law guiding the league says anyone with conflict of interest will not be allowed to take any role, and since the former midfielder keeps ten percent of shares at Salford, it became hard.
"It is great that Paul is back in football and everyone at the club wishes him all the best in his new venture into football management".
"There was talk when I finished my career, but it wasn't something I was quite ready to do".
Scholes, a member of Manchester United's famed "Class of '92" alongside David Beckham and Ryan Giggs, said he wanted to entertain Oldham's fans.