The current Everton boss, who will take over on July 1, described his appointment as a "great honour".
Paying tribute to his fellow Scotsman, he said: "I am delighted that Sir Alex saw fit to recommend me for the job. I have great respect for everything he has done and for the football club.
"I know how hard it will be to follow the best manager ever, but the opportunity to manage Manchester United isn't something that comes around very often and I'm really looking forward to taking up the post next season."
Sir Alex, who is stepping down after 26 years in charge, said the club had "unanimously agreed" upon Moyes.
"David is a man of great integrity with a strong work ethic. I've admired his work for a long time and approached him as far back as 1998 to discuss the position of assistant manager here," he said.
"He was a young man then at the start of his career and has since gone on to do a magnificent job at Everton. There is no question he has all the qualities we expect of a manager at this club."
The appointment of Moyes was confirmed in a statement on Manchester United's website, in which co-chairman Joel Glazer praised his "hard-working style and steely determination".
However, the club inadvertently posted the announcement on their Facebook page, starting a flurry of activity on Twitter and other social media.
Sky Sports commentator Ray Wilkins said he was "delighted" for Moyes but added it would be important for the established players to rally around their new manager.
He told Sky News: "I am sure they will give David the utmost respect when he walks through the door because of the job he's done in his managerial career up to now."
Former England manager Steve McClaren told Sky Sports News: "He has a near identical work ethic, character, competitiveness to that of Sir Alex.
"He will have Sir Alex at his side and if they get on, as I know they do, it's the master and the apprentice."
Earlier, Everton confirmed Moyes would be leaving at the end of the season.
In a statement, the club said he had been an "outstanding manager" who had made a "massive contribution" to the club.
Moyes, 50, has managed Everton for more than a decade, joining in 2002 after a spell in charge at Preston North End.
Despite having a comparatively meagre budget at Goodison Park, Moyes has kept the team in the Premier League's top eight since 2006.
Former Scottish international Lou Macari said his record at the club had been excellent and praised the players he had bought.
"He hasn't had much money and he has managed to get Everton in a reasonably good position every year," he said.
"Obviously he'll be given cash (at Manchester United) so he will build his own side and he'll have the ex-manager behind him, so I don't see any problems whatsoever."
Moyes' final two games as Everton manager will be against West Ham and Chelsea.
The club said it would start the search for a replacement manager "immediately", with Swansea's Michael Laudrup and Wigan's Roberto Martinez among the bookmakers' favourites for the job.
Sir Alex, 71, guided United to 13 Premier League titles and two European Champions League crowns during his time in charge.
"The decision to retire is one that I have thought a great deal about and one that I have not taken lightly. It is the right time," he said.
"It was important to me to leave an organisation in the strongest possible shape and I believe I have done so."
Moyes' appointment as Sir Alex's successor ends speculation that Real Madrid's Jose Mourinho could be given the job.
The former Chelsea boss has also been linked with a return to Stamford Bridge.www.google.com
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