Wales' oldest club suffered relegation from the Football League at the end of last season.
But their start in the Blue Square Premier League has been disastrous, and one win in six league games cost Brian Little his job as manager last week.
No
w Saunders, who has held top coaching jobs at Blackburn and Newcastle, has taken the gamble to start his management career outside of full-time football.
Saunders has been working as coach to the senior Wales squad under manager John Toshack, and will be allowed to combine the two roles.
His first match in charge, having been officially appointed today, will be at Forest Green on Saturday before he joins up with the Wales squad for their World Cup qualifiers against Liechtenstein and Germany on October 11 and 15.
Saunders, who also played for Aston Villa, Swansea, Cardiff and Galatasaray in a glittering 10-club career and has always kept his home in Cheshire just across the border from the Racecourse ground, is Wrexham's fourth boss in 22 months.
Little had been in charge for just 11 months, but left the club last week just hours before thee home draw with Torquay, with Brian Carey and Martin Foyle left in charge of the side.
Saunders' appointment has come as a surprise. Earlier this week he was invited - along with his former Liverpool boss Roy Evans - to oversee a practice match at Wrexham to help Moss evaluate the playing squad.
Evans has also acted as an advisor to the north Wales club in recent months.
At the time chairman Geoff Moss made it clear that Saunders was only offering advice.
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