Carrick, who took over from Ruben Amorim in January, has recorded 11 Premier League wins in 16 matches, which included a seven-game unbeaten streak.
The former midfielder has led the club to a third place finish, securing Champions League football for next season in what has been an incredible turn around.
Since Carrick took over, United are top of the Premier League form table with 36 points from a possible 48. He will stay on as their head coach on a two-year contract as the board show faith in the 44-year-old.
This will be Carrick first permanent managerial role since being sacked by Middlesbrough in June 2025 as the club announced the news on Friday morning.
Carrick spoke to the club website as the news was announced on Friday morning, news that will delight many supporters.
“From the moment that I arrived here 20 years ago, I felt the magic of Manchester United.
“Carrying the responsibility of leading our special football club fills me with immense pride.
“Throughout the past five months, this group of players have shown they can reach the standards of resilience, togetherness and determination that we demand here.
“Now it’s time to move forward together again, with ambition and a clear sense of purpose. Manchester United and our incredible supporters deserve to be challenging for the biggest honours again.”