A statement on the club's official website said: "Paul Scholes has rejoined the playing staff at Manchester United for the remainder of the season with immediate effect, after approaching Sir Alex Ferguson to reverse his decision, made at the end of last season, to retire.
"He has gone straight on to the bench for this afternoon's FA Cup third-round tie against Manchester City."
Ferguson, United's manager, said: "It's fantastic that Paul has made this decision. It's always sad to see great players end their careers, but especially so when they do it early. But he has kept himself in great shape and I always felt that he had another season in him. It's terrific to have him back."
Scholes said: "I've been pretty clear since I stopped playing that I miss it. I'm delighted the manager feels I can still make a contribution to the team and I'm looking forward to playing my part in trying to bring more success to this great club."
Scholes retired at the end of last season, after helping United to win their 19th league title. He has made 676 appearances for United, scoring 150 goals, since making his debut against Port Vale in the League Cup in 1994. He has won 66 caps for England.