The former Carlisle United, York City and Derry City defender will be in the dugout for Boro's next home league fixture against derby rivals Whitby Town on Saturday.
Kelly, who has managed Oldham, Halifax Town and Hyde United, is overjoyed at being given the opportunity to take the reins at Boro.
He said: "Firstly, I would like to thank the Scarborough Athletic board for this amazing opportunity, but obviously it is sad that a manager has lost his job.
"For me, all you have to do is look at the history of football in Scarborough to see how big a job this is.
"I played for Scarborough during their time at Bridlington and I got a taste of the passion that the fans have for the club.
"I love the challenge of being able to build something very successful.
"It will take time to implement how I work, but I believe that we can create something big.
"If we can get a few hundred back onto the gate and fans continue to come to watch, then in the next few years I don't see why we can't be pushing to be in the National League.
"I want the Scarborough to become a fortress. When I came here before as a manager I never really felt that.
"I want opposition players to be worried when they come to Scarborough because they'll know they are up against a well organised, fit team and a hostile crowd that backs the team 100%."
Kelly will be running a rule over things in the next few days to take stock on what is required going forward.
He added: "There will be an audit process and a clean slate.
"There needs to be a change of mindset from day dot.
"The lads need to think differently and start enjoying their football again.
"Maybe the lads have had their confidence knocked, it is down to me to challenge that and get them playing to their full potential.
"At the same time I only want players and staff at the club that wear the Scarborough Athletic badge with pride.
"They have to be 100% behind the club, 99% is not good enough. Anyone that isn't can shake my hand and leave with my blessing."
Chairman Trevor Bull added: "I'm absolutely delighted that we've been able to bring Darren to the football club.
"Obviously he wasn't our best friend when he knocked us out of the FA Cup with Hyde a couple of years ago, but that is when he first came to our attention.
"He is a young, ambitious manager that shares our belief that we can move this club forward in a positive way.
"Sometimes things all fall in to place and we decided that it was time for a change in manager. That coincided with Darren departing Hyde United.
"We made contact and arranged to meet him. We'd recently gone through a recruitment process where we had 50 applicants. At this stage of the season we needed to move quickly.
"We need to get behind the players now because getting on their backs isn't going to help.
"We have a great opportunity against Staithes where we can show how we can support our club.
"Due to prior commitments Darren won't be there for the Staithes game, but on Saturday, in the derby game against Whitby, we are hoping fans come down in force and give him a real welcome to the club."« Back to news