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Having joined as a player-coach, the 35-year-old had recently taken interim charge of Derby County following Phillip Cocu's dismissal.
And after an impressive run during his first nine games in charge, Rooney has been given the job on a permanent basis - penning a two-and-a-half year contract in his first managerial role.
Liam Rosenior, Shay Given and Justin Walker will remain part of his coaching staff but the news means Rooney will not step onto the pitch in a competitive game again.
He retires as Manchester United and England's all-time record goalscorer and will go down as one of the best players of his generation.
Having burst onto the scene as a 16-year-old for boyhood club Everton, Rooney scored 313 goals at club level and hit 53 in 120 caps for England to break Sir Bobby Charlton's record.
He won a total of 16 major honours at United, including five Premier League titles, three League Cups, one FA Cup, one Champions League and one FIFA Club World Cup during a glittering stint.
The only player to score over 200 goals and provided 100+ assists in the Premier League, Rooney also had two stints at Goodison Park with Everton, as well as a venture across the pond with MLS outfit D.C United.
Reflecting on his first foray into management, Rooney told the official Derby County website: "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 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."
Remember the name, Wayne Rooney.
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