Ashworth is expected to play a key role in the Red Devils' summer transfer activity and is the latest addition to Sir Jim Ratcliffe's new-look club hierarchy.
The 53-year-old served as the Magipes' transfer exert for most of their Saudi-owned era, and played a major part in signing the likes of Alexander Isak, Anthony Gordon and Sven Botman.
Initially, Newcastle were believed to be demanding £20m in compensation for their now-former FA Technical Director, while United sought to pay significantly less.
However, a compromise was reached in the last few days, following several months during which he was placed on gardening leave while negotiations between the clubs unfolded.
Man United confirm Dan Ashworth arrival
On Monday, a joint statement from both clubs declared: "Newcastle United and Manchester United have reached an agreement for the immediate release of Dan Ashworth from his contractual obligations at Newcastle United.
"The terms of this agreement remain confidential between the clubs. Newcastle United thanks Dan for his services and wishes him well for the future."
It is understood that the 53-year-old will commence his role in the new-look United structure with immediate effect.
In the last six months, Ratcliffe has also brought in Omar Berrada from Manchester City and former Southampton technical director Jason Wilcox to help steer the club in a new direction.
The United part-owner also made a major call to retain the services of Erik ten Hag, who was under severe scrutiny following a dismal league campaign.
It is understood that INEOS conducted an extensive review of the Dutchman's role, which involved discussions with potential replacements.
However, they decided to stick with the 54-year-old former Ajax boss, who is reportedly set to receive a new contract worth around £20m.
Busy summer on the cards for Red Devils
With back-office reinforcements now in place, United are expected to be busy this summer, in terms of both new arrivals as well as departures.
Among the players who have been linked with a move to Old Trafford in recent weeks are Bayern Munich's Matthijs de Ligt and Everton defender Jarrad Branthwaite.
The club are also believed to be looking for a new attacker and a central midfielder to partner Rasmus Hojlund and Kobbie Mainoo, respectively.
As for exits, Raphael Varane and Anthony Martial have now left Manchester, while the likes of Jadon Sancho, Mason Greenwood and Casemiro's futures are still up in the air.
United finished in eighth place in the Premier League last term but earned a spot in next season's Europa League by winning the FA Cup against cross-town rivals Manchester City.