The 31-year-old, who is the son of Yeovil boss Gary Johnson, has replaced Paul Dickov in the Boundary Park hotseat and takes over from MK Dons boss Karl Robinson as the youngest manager in the Football League.
Oldham announced on their website that Johnson, who has no previous managerial experience, was the outstanding candidate from 120 applicants after he impressed chairman Simon Corney and the board of directors.
Midfielder Johnson started his playing career as a trainee at Watford before moving on to Brighton and Yeovil, playing over 200 games for the Glovers and helping them to promotion from the Conference.
After a brief spell in Scotland with Hearts he returned south and spent over five years with Bristol City before heading north of the border once again in January 2012 to join Kilmarnock, who released him this January.
Tony Philliskirk has been in caretaker charge since Dickov's departure and Oldham remain in the League One relegation zone after three successive defeats, although they still have games in hand on the teams above them.
Johnson said: "I acknowledge it is a baptism of fire, but who gets a job when you are top of the league and flying?
"That is why I have got the job and hopefully fans will give me time and take to me when they know I give 100 per cent at all times.
"There are some good players here because I have played against them and with them in my career.
"Can I get that ignition from their gut in a high-pressure situation? That is the challenge."
Johnson's first game in charge will be on Tuesday evening when fellow strugglers Hartlepool visit Boundary Park and he will come up against his father's team Yeovil in another home game on April 16.
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