Wrexham owner Geoff Moss has allowed Saunders to combine his new job with his part-time coaching job with the Welsh international squad.
Saunders said: “This is a massive step for me.
“I won’t rest until I see Wrexham back in the Football League.
“We must aim to be in the play-offs at the very least come the end of the season.”
Moss said: “I’m delighted to have secured someone of Dean’s standing.
“Initially I only asked him to give me his advice on certain aspects of the club but after long talks with him I realised that this is something he wanted to get involved with.
“His enthusiasm is infectious and it’s something that really excites me, and as to what he can bring to us.
“Even then I thought his position with Wales would rule him out, that has been talked through with John Toshack.
“Dean is very keen to take on his first managerial role and I’m looking forward to seeing him in charge at the Racecourse.”