Neville becomes The Lionesses new boss after Mark Simpson was dismissed last September.
It is the first managerial post for the 41-year-old, who has served as an assistant at United and Valencia.
"I am honoured to be given the chance to lead England," Neville said.
"With the new coaching team we are putting in place, we can help the players build on their great progress in recent years. This squad is on the verge of something special and I believe I can lead them to the next level.
"I can't wait to get out on the training pitch and down to work with an elite group of players at the top of their game.
"I am also passionate about working within the wider set-up at St. George's Park, with influential people such as Mo Marley and Casey Stoney, and with the support of Baroness Sue Campbell and the wider women's game.
"There is a commitment to excellence that has paid dividends in recent years and I know we can continue the great growth of women's football inspired by the Lionesses.
"There is no greater honour than representing your country and it will be a privilege to do it again."