His No 2 will be former Candystripes man Paul Hegarty.
Devine, a Derry native, is a former goalkeeper with a variety of clubs who struck up a good relationship with Kenny. Indeed, he went to Dunfermline with Kenny as a coach and linked up with him again at the Brandywell when the Scottish move failed to work out.
It's understood that Kenny had Devine in mind as a possible assistant at Shamrock Rovers.
However, Devine has taken the opportunity to go out on his own. He is regarded as a good coach, but the 38-year-old will now have to prove his managerial credentials.
The Derry board have gone for the local option ahead of Scot Willie McStay, who was interviewed earlier this week.
Devine will be working with a nucleus of young local players in the forthcoming campaign, although he may have to do without talented left-back Daniel Lafferty, who is expected to move across the water.
Sligo boss Paul Cook also talked to Derry about the job but wasn't interested. He continued his winter recruitment yesterday with the capture of talented midfielder Lee Lynch, who made a positive impact at Drogheda last season.
Meanwhile, Kenny still has work to do with regards to his Shamrock Rovers squad for 2012. He will be without the services of Belgrade hero Pat Sullivan as the right-back is turning his back on football to go travelling. The Hoops have tied down young defender Sean Gannon, however.
The new Rovers boss still has to speak to some members of last year's squad, and could yet retain the services of Scottish duo Craig Sives and Jim Paterson. Sligo are keeping an eye on Sives.
Graham Gartland is another possible option. The Dubliner has confirmed his departure from SPL club St Johnstone, but is understood to be weighing up his next move with other possibilities in Scotland.