Boone, who will be introduced Wednesday at Yankee Stadium, signed a three-year contract through the 2020 season with a team option for 2021. He becomes the 18th Yankees manager to have played for the club.
The 44-year-old Boone replaces Joe Girardi, who was dismissed on Oct. 26 -- shortly after the Yankees fell one win shy of advancing to the World Series by losing Game 7 of the American League Championship Series to the Houston Astros.
"Words cannot express how humbled I am to wear the pinstripes again as the manager of the Yankees," Boone said. "I want to thank the Steinbrenner family and Brian Cashman for entrusting me with this tremendous honor and responsibility. I believe we are entering into a special time in New York Yankees history, and I am so excited to be a part of it. I can't wait to get to work -- and that work starts now."
Boone has never been a manager or coach at any level since retiring after the 2009 season.
He has been beloved in the Bronx, however, since helping the Yankees to a 2003 World Series title with a walk-off home run in the 11th inning in Game 7 of the ALCS against the Boston Red Sox.
"I firmly believe that Aaron possesses the attributes needed to follow in the tradition of great Yankees managers," Yankees owner Hal Steinbrenner said in a statement. "From all accounts, he is a polished communicator who possesses the ability to cultivate and grow relationships. Aaron has also spent a lifetime immersed in baseball, affording him a unique and intimate understanding of what fosters team success.
"Aaron's name is already etched into Yankees history, and my family and I are excited to welcome him back to this franchise. This opportunity will allow him to continue to make a positive impact on this organization in distinctly new and meaningful ways."
In 54 regular-season games with the Yankees, Boone hit .254 with six homers, 31 RBIs and 31 runs scored.
Boone was a third baseman from 1997 to 2009 and an All-Star in 2003, when New York acquired him from the Cincinnati Reds at the trade deadline.