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The board of directors unanimously chose Mills ahead of the 19 other applicants, after he impressed them 'with his enthusiasm to fight for the survival of the club in Division Two'.
Mills will be a popular appointment with the fans, as he played for The Magpies in two different spells, firstly from 1987-89, and 1994-96.
He has since managed with some success at Grantham Town, Kings Lynn and Tamworth, leaving them in July 2002 to become First Team Coach at Coventry City.
More on Mills' appointment to come later in the day on NCM.