Lynch played for Cables earlier in his career and was the unanimous choice of the club’s board.
He will take immediate charge and his first game will be in the FA Trophy this Saturday against Frickley Athletic.
Co-chairman, Matt Roberts, said: “(We are) delighted to bring Kevin on board, his experience in this league is exactly what we need at this time to take the club forward.
“Kevin is Cables through and through and has a huge affinity with the club. He is someone who we believe the fans can get behind and players will respond to straight away.
“The board understands that Kevin will need time to implement his changes and bring the stability that we need at this time.”
Prescot also moved to thank Lee Bignell for taking charge of the first team following the departure of Craig Davies in September.
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