The appointment comes days after Craig Robinson resigned from the club.
City of Liverpool claimed their first win of the season over the weekend with a 5-2 result away to Brighouse Town, and Ellison was present as the existing coaching staff took charge of the team.
Club chairman, Paul Manning, said “Michael has exactly what we are looking for at this point in time for the club. His passion and ambition to win football matches mirrors ours and we are looking forward to seeing our team instilled with Michael’s belief in COLFC’s ability to compete in this league."
On the appointment, Ellison added: “I’m just delighted to be back in football and to be manager at City of Liverpool FC, a club that shares my ambitions and drive.”
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