Former Rotherham United chief - linked with Barnsley FC and Huddersfield Town - back in management at League Two club
The 51-year-old has signed a "long-term contract" and replaces Scott Lindsey following his sacking last month. He will be assisted by long-time number two Richie Barker, who had a previous spell as assistant at MK almost a decade ago.
Warne has won four promotions from League One, three at Rotherham and one at Derby. He was sacked by the Rams in February.
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Hide AdSpeculation had linked him with several recent vacant positions, including Barnsley and Huddersfield.


He said: "The potential of the team under the ownership of Fahad (Al Ghanim) and the Board is truly limitless, and I'm extremely grateful to be given the opportunity to manage the side over the coming years," Warne told the club website, external.
"This is an amazing project, and we're so excited to drive it forward."
He becomes the third permanent appointment at MK Dons this season.
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Hide AdWarne will take charge of MK for the first time against Newport County at Stadium MK on Good Friday.


MK CEO Neil Hart said: “Following an exhaustive and comprehensive interview process Paul was the standout candidate and for us represented a huge step in the right direction.
"His incredible record in the EFL speaks for itself, and we’re confident we’ve appointed a bonafide winner whose pragmatism and adaptability on the pitch will take us forward.
" I know our fantastic supporters and the people of Milton Keynes will get right behind him, starting at Stadium MK this Friday.”
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