Bates has been in temporary charge since the end of February and produced five victories from his time as interim boss to help guide Pools to National League safety.
New chairman Raj Singh has been impressed with the work done by the 31-year-old and has now moved to reward him for that by offering him the role on a permanent basis.
Bates told the club`s official website: “I feel privileged to be named as manager, this is a great opportunity.
“As a young manager wanting to get on that ladder I don’t think there is a better environment than there is here at The Vic right now.
“The new owners have come in and it’s a fresh start for everyone; it’s a big club so I am over the moon really and I can’t wait to get the hard work started.”
Ged McNamee has been named as first-team coach and Ross Turnbull is the new goalkeeper coach after the pair worked alongside Bates free of charge during the upturn in form over the last two months.
“I’m really pleased with the appointment,” said Singh. “Matthew has done really well and didn’t really give us that much of a choice.
“We interviewed three or four good quality candidates, but I think Matthew’s results speak for themselves so in the end we went with him.
“His points tally and win rate was really good and with the other two guys behind him we feel like we have the right management team in place to move us forward.”
Director of football Craig Hignett added: “We’re delighted. At the end of the season things had really turned around and the staff worked really well together.
“Ged and Ross have been a big part of what has happened at the club so we’re pleased to get them two secured as well as to have Matthew signed up as manager.
“It’s great to get them in early because that gives us a bit of a head start because now we can start planning for the players and the direction we’re going to go next season”.