In his second spell as interim coach for the Rangers in eight months, Murty is to succeed Pedro Caixnha, who was fired by Rangers management after a 229-day tenure.
"The Club's directors believe Graeme has demonstrated he is capable of handling this task successfully and are confident the players will continue to respond to his leadership in a positive manner," the club said in a statement on Friday.
"With so much still at stake in the current season this decision was not taken lightly but now that Graeme has been given full control, he can work towards the obvious targets with greater focus," the statement added.
Meanwhile, Murty, the former under-18 team coach, said he was delighted to take the helm.
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