The 35-year-old has signed a two-and-a-half year deal to take charge of the Rams until the summer of 2023.
And as a direct result of the appointment, Rooney has announced his decision to retire from playing with immediate effect to concentrate solely on the role.
"When I first arrived back in the United Kingdom I was completely blown away by the potential of Derby County Football Club. The Stadium, Training Ground, the quality of the playing staff and the young players coming through and of course the fan base that has remained loyal and supportive," Rooney told the club's official website.
"Despite other offers I knew instinctively Derby County was the place for me.
"To be given the opportunity to follow the likes of Brian Clough, Jim Smith, Frank Lampard and Phillip Cocu is such an honour and I can promise everyone in involved in the club and all our fans, my staff and I will leave no stone unturned in achieving the potential I have witnessed over the last 12 months of this historic football club."
Rooney, who is England's all-time record goalscorer, will take charge of his first game as permanent manager on Saturday at home to Championship rivals Rotherham United.
And speaking about the Rams' new era under Rooney, their chief executive officer Stephen Pearce couldn't contain his excitement.
"During that nine-game run we also dramatically improved their defensive record and registered five clean sheets in the process, while in the attacking third we became more effective and ruthless too.
"Those foundations have provided a platform for the club to build on in the second half of the season under Wayne's guidance."