Stoney, who won 130 international caps and 12 major trophies during her playing career, became the assistant manager of Phil Neville's England upon her retirement from playing earlier this year.
The 36-year-old represented Arsenal, Charlton Athletic, Chelsea, Lincoln and Liverpool at club level. Stoney also acted as player-manager of Chelsea during the 2008-09 season.
On the announcement of her appointment, Stoney revealed her intention to “build a philosophy” that will inspire young girls to play for United.
“I am delighted to have joined Manchester United. This the biggest club in the world,” she said. “The fact that we are going to have a women’s team and I’m going to be able to introduce that from scratch, to build a team, build a philosophy, with the biggest club in the world, means that, for me, there is no more exciting opportunity.
“My ultimate aim is to grow this team so that every little girl growing up dreams of playing for Manchester United when she’s older, because they’re the most successful team in women’s football.”
United’s application to compete in senior women's football was approved last month, with the newly-formed team due to enter the 2018-19 FA Women's Championship - the second tier of competition.
The club were previously the only men's Premier League outfit not to run a women’s side, having disbanded their former team in 2005.
Ed Woodward, United’s executive vice-chairman, claimed Casey’s appointment proves the club is determined to succeed in women’s football.
“Appointing Casey shows the desire we have to succeed and her experience and knowledge of the game, both as a coach and as a player, made her a stand-out candidate for the role," he said.
“During her successful playing career, spanning over 18 years, she earned over 100 caps for England and is a proven leader as a coach and having captained many of the sides she has played for, she brings a positive and winning mentality which will be a huge benefit to the team.”
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