Having already filled the role twice, once as caretaker, Dearden returns to Field Mill in the hot seat.
Paul Holland will revert back to Assistant Manager.
Dearden told the official Mansfield Town Website "I know the fans are behind me and I can't wait to start,"
Talks were long and hard as they always are but we have arrived at a conclusion we are happy with.
"I have fond memories of Mansfield Town and the good young players I had - and I think that the boys here now are similar. I believe that they can be even better than they are now.
"I have known Paul for a number of years, bringing him to the club as a 14-year-old, so we have a lot of history and I am looking forward to working with him."
The Stags are currently 19th in the League Two table and Dearden said: "They are currently in the bottom five so my immediate job is to get them into the top half of the table."