Smith managed Oxford between 1982 and 1985

The club's new owner Nick Merry, who purchased the the club from former chairman Firoz Kassam on Wednesday, confirmed Smith's appointment.

"On the football management side, Jim Smith takes over with immediate effect as manager," Merry said a statement on Oxford's website.

"He is finalising discussions with his management and coaching team."

The move marks a return to the club for Smith, 65, following his successful spell at the club between 1983 and 1985 - when he led them into the top-flight.

Former Derby manager Smith has been out of football since his contract as coach was not renewed at Southampton following their relegation from Premiership last summer.