"I am delighted to return to Scunthorpe United, where I had six fantastic years as a professional. I feel like I am returning home and want to be part of an ambitious club moving forward," said Daws, who played for the Iron between 1987 and 1993.
He will replace Paul Wilson, who has been at Glanford Park for 10 years but has left to join Doncaster Rovers
Daws has plyed his trade at Notts County, Sheffield United, the Cods and Lincoln City.
Following his retirement from the game in 1996 he joined the coaching staff at Sheffield United as a part-time youth development Officer.
In 2000 he became their assistant academy and under-19 coach, before leaving for city rivals Sheffield Wednesday in 2004.
Daws still had a profile in the area, and maintained his popularity with Iron supporters, becoming a pundit on BBC Radio Humberside - commentating regularly on Iron games over the last three years.
United Chairman Steve Wharton said: "We are fortunate to replace quality with quality. We had that in Paul Wilson and I know that Tony Daws will build on what Paul has achieved and take us to new levels of excellence."