The quintet, who all rose to prominence under former United boss Sir Alex Ferguson, had been linked with the Northern Premier League First Division side for some months.
It had been reported that Giggs and Gary Neville had initially entered talks with Salford with a view to purchasing the club and creating an academy, before drafting in their former team-mates.
The deal is set to be completed in the summer, with Scholes tipped to become manager.
"Salford is close to all their hearts," the group said in a statement. "Manchester United nurtured and developed them but Salford is where it all began so, when the opportunity arose to acquire Salford City FC, it was one they all wished to pursue.
"They want to put back into the community of Salford and surrounding areas, they want to develop and engage especially at grass roots level."
"I had my first trial for Manchester United in Salford at age 11 and I will never forget how important that was to me," added Gary Neville, who is currently a TV pundit.
"Salford City FC, to me, represents those early years, the commitment, hunger, enthusiasm, desire and spirit of football and I am very excited about this venture."
Scholes, who retired from playing for a second time this summer, said: "We know it will be tough but we will be committed to this from the start and have some very exciting plans going forward."
Only Giggs remains a player, with Phil Neville an assistant coach at Manchester United, with Butt involved in the youth set-up at Old Trafford.
The news appears to pour cold water on rumours that Scholes, Giggs and the Nevilles were plotting a 'coup' style overthrow of United boss David Moyes.
The other high-profile 'Class of 92' member, David Beckham, is launching an MLS franchise in Miami.
Salford sit three promotions below Conference football and have existed in some format since 1949.
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