The acquisition of the Evo-Stik League Division One North club is due to be completed later in the summer.
Confirmation of the deal, which has been rumoured for several weeks, comes on the same day as United rejected reports suggesting members of the 'Class of 92' could front a takeover deal at Old Trafford.
The group have strong roots in the area and they want to put something back into the community of Salford and surrounding areas.
With Giggs still an active player at United, Phil Neville on David Moyes' coaching staff and brother Gary involved with England and Sky Sports, it is not yet known precisely what role they plan to take in their new venture.
However, it is understood there will be no immediate change to the management structure at Salford City, whose home ground is on Moor Lane in Kersal.
Gary Neville said: "I had my first trial for Manchester United in Salford at age 11 and I will never forget how important that was to me.
"Salford City FC to me represents those early years, the commitment, hunger, enthusiasm, desire and spirit of football and I am very excited about this venture."
Scholes said: "We know it will be tough but we will be committed to this from the start and have some very exciting plans going forward."
Butt said: "Moor Lane's sporting heritage dates back 320 years, the oldest of its type in the Manchester area and this should be safeguarded so it becomes a lasting legacy for future generations."
Phil Neville said: "It is important to safeguard the hard work that is done in the lower leagues and it is going to be exciting to be able to feed our experience into the young players."
Giggs said: "Everyone knows how important Salford is to me, so this is an exciting acquisition that is right at the heart of what we all believe in.
"We want to engage the football community, use our football experience and knowledge to aspire and nurture young talent and being able to do that in Salford makes it even more exciting."
Salford City chairperson Karen Baird, who was instrumental in the deal, said: "It is an exciting time for Salford City FC and I believe there are many more great achievements to come for the club.
"Without a doubt this deal will result in a very bright future ahead and is a great advert for non-league football.
"The club are in full support of the group and believe it to be a very positive move both for Salford City FC and the City of Salford itself."