The former Frickley Athletic player, 22, has penned a three-year deal with The Iron.
Woolford scored 25 goals in 102 appearances for the Minstermen following his arrival at the Blue Square Premier League side in August 2006.
City's communications and community director, Sophie McGill, said, 'Martyn's attracted a lot of interest in pre-season.
"He was offered an extended contract by York City in June, but didn't sign it as he wished to keep his options open.
"Scunthorpe United made the club a very good offer for Martyn and he was also keen to join them in order to further his football ambitions."