The 35-year-old former Arsenal and Wales midfielder replaces Matt Bloomfield, who was sacked on Saturday. Oxford finished 22nd in the Championship last season, four points from safety.
Ramsey retired from playing in April following a brief spell at Mexican club Pumas UNAM, bringing the curtain down on a career that included 369 appearances for Arsenal — where he won the FA Cup three times — a Serie A title at Juventus and 86 caps for Wales. His only previous managerial experience came at the end of the 2024-25 season, when he stepped in as Cardiff City's interim boss for three matches.
"It's an honour and privilege to be appointed head coach of Oxford United," Ramsey said.
"From my discussions with the club, I can sense the ambition and desire for success, which gives me great excitement about this opportunity.
"This is a moment I have been preparing for over many years. I've played under some of the best managers in the game and experienced high-pressure environments throughout my career.
"I want to use what I've learned to bring a culture of high standards, professionalism and work ethic to this talented group of players.
"My teams will play with a clear identity, be built on elite habits, with a commitment to improving every day.
"I want a squad that fights for the badge until the end, and one that makes our supporters proud."
Oxford United face the task of an immediate return to the Championship under a rookie permanent manager. Ramsey's former Arsenal teammate Jack Wilshere is also currently working in League One, in charge at Luton Town.