The legendary former Sunderland and England striker replaces former Pools midfielder Chris Beech, who was sacked last month after the Coasters made a stuttering start to the new season, picking up just five points from their opening eight games.
Phillips, who spent two seasons in charge at South Shields and led the Mariners to promotion to the National League North, was appointed Pools boss in January following the departure of John Askey.
The 51-year-old, who scored 30 Premier League goals in the 1999-2000 season, winning the European Golden Shoe, made a superb start to life at the Prestige Group Stadium as Pools won four and drew one of his opening five matches.
Phillips won seven of his 16 games in charge in the North East as he steered Pools away from the relegation zone and to a 12th placed finish.
Prior to his arrival, Pools had been flirting with the relegation zone but brief hopes of a late surge towards the top seven were dashed following a faltering run that included a 7-1 mauling at the hands of Gateshead.
But Pools bounced back, defeating Halifax 1-0 and earning a point away at Rochdale to virtually guarantee their place in the National League.
With seven of Phillips’ sixteen games in charge, Pools ended 12th with 60 points after a thrilling 4-3 victory against Dorking on the last day.
He told the Hartlepool Mail that he was “very close” to signing a new contract, but he never did. A week after the season finished, he quit the team because Pools decided not to extend his contract in favor of appointing Darren Sarll.
It was a controversial decision, with Phillips issuing a statement through his representatives alleging that the club had withdrawn their initial offer of a two year deal.
Phillips takes over with the Coasters fourth from bottom and one point from safety.
He will return to the Prestige Group Stadium next month when Pools host Fylde on November 26.
Fylde chairman David Haythornthwaite said Phillips was the “clear favourite” for the job after a round of initial interviews at Mill Farm.
“The search for the new manager has taken maybe a bit longer than people expected but this is reflective of the interest we had received in the position,” he told the Fylde club 
website.
“Kevin was presented to us at an early stage and was invited with several others to Mill Farm for a lengthy interview and, after that, was the clear favourite.
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