Carrick, 44, took charge in January after Rubén Amorim was sacked following a deteriorating relationship with club officials over tactics, results and formation.
He won 11 of his 16 matches in charge, including victories against Manchester City, Arsenal, Aston Villa, Chelsea and Liverpool, and has been named on a six-man shortlist for the Premier League's manager of the season award.
The appointment was recommended to the ownership by director of football Jason Wilcox and chief executive Omar Berrada, with Sir Jim Ratcliffe and the Glazer family giving their approval after a process the club describe as thorough and discreet. While Thomas Tuchel and other candidates were considered, Carrick was identified as the best option.
Carrick spoke about what the role means to him personally.
"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."
His attention to the club's academy was noted as a significant factor in his favour. Amorim had attended only one youth match in person during his tenure, when it was taking place on an adjacent pitch at Carrington. Carrick's consistent engagement with younger players was considered a meaningful reflection of his values and commitment to the club's long-term development.
Talks over the futures of his coaching staff, including former England number two Steve Holland, are at an advanced stage and no complications are expected.
Carrick spent 12 years at Old Trafford as a player, winning five Premier League titles, the Champions League and the FA Cup. This is his second experience as United's temporary manager, having also taken three games in charge after Ole Gunnar Solskjaer's dismissal in 2021.