The former Nottingham Forest, Derby County and Aston Villa right-back, 47, succeeds Dino Maamria, who left to take over at Stevenage last week.
Chairman Lee Thorn thinks he has got the right man after confirming the way ahead for the National League North club.
"I've known Gary a long time and admire his professionalism and commitment," Thorn told the club's website. "It was always the plan to have him involved at Nuneaton from next season, so when the position of Manager opened up it was an easy decision."
“It's an exciting new chapter” said Charles. “It's nice to be back on the training ground and being around the players.
"We've got a good mix of older and younger professionals and I've had the chance to bring some of the youth team players in to train with the first team squad.
"It's been a good first week or so and it was great to start off with a win against Walsall which gave us a good base carry to in to the Alfreton Town match on Good Friday.”