Mackay joined Watford in 2005 as a player. He has been reserve team coach, player coach, caretaker manager and now he gets the top job.
Mackay has been handed a three year contract and in an interview with the club's website, he said:
"The fans will see the person that I am and that is the person I have been throughout my career.
"As I was when I was the captain of Queen's Park and Norwich, I will be here to lead - along with the great staff that I'll have around me.
"I want to breed the correct ethics and values - such as team spirit, honesty and a willingness to learn.
"I want the supporters to enjoy coming to see Watford play and the players will give their all for the cause."
Mackay knows that it's like to take responsibility.
"I took over as caretaker back in November and have experienced working with the youth and reserves. Now I'm stepping up and I'm ready to take that into the first team.
"It's good that I've had a taste of what is to come. By the time I finished my caretaker role there was nothing that frightened me, I was more determined than ever and I thoroughly enjoyed it as well.
"The players were playing for me and if you lead players they want to follow.
"But it's also a credit to the players and staff for their response during that difficult time for the club."