"Coming from the north west and having attended matches at Old Trafford during my youth, I understand the proud history of the club and how passionate the supporters are.
"If I was to think about any other job to take after leaving England it would have been the Lancashire job, and I cant wait to get stuck in.
Moores has a fine track record in county cricket, having guided Sussex to the first County Championship title in their history in 2003, having won promotion the previous year, a season in which they also finished top of the 40-over National League Division Two.
His achievements with Sussex eventually resulted in him being appointed director of the National Cricket Academy at Loughborough in 2005 before replacing Duncan Fletcher as head coach of England two years later.
His time in charge of the national team began well with a 3-0 home Test series victory over West Indies, but prior to his sacking they were beaten 2-1 at home by South Africa and lost 1-0 in India.
We share many values and beliefs
Mike Watkinson on Moores
He also failed to improve their fortunes in one-day cricket, with the team winning only 14 of the 36 limited overs internationals played under him.
Despite that, Watkinson said he was "delighted" that Moores would be joining the management team at Old Trafford.
"I have known him for many years, initially as a player, then in his various coaching roles, and he has the quality and experience to take the first team squad forward.
"We share many values and beliefs and I'm looking forward to working closely along side him to further improve the performance of the professional squad."
Lancashire are hoping Moores can produce the same result he achieved with Sussex, namely guiding them to the County Championship.
The Red Rose club has not won the title outright since 1934, although they did finish as joint winners with Surrey in 1950.
"Lancashire is one of the biggest cricket clubs in the world, and success is what our members and supporters demand and long to see," chief executive Jim Cumbes commented.
"We always knew this position would create a lot of interest, but we could not have envisaged the amount of world-class candidates who applied for the role.
"However, Peter's resume speaks for itself and what he achieved with Sussex is the envy of all counties.
"Having been involved in the interview process, I know we have the right man for the job, and under the direction of Mike Watkinson, we now have a structure in place that will take cricket throughout the entire county forward."
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