The 54-year-old, initially appointed as an assistant in February, stepped into the breach as interim boss during the summer after the long-serving Steve Bruce relinquished his role amid ongoing frustration at a lack of transfer business following last season's promotion via the Championship play-offs and a breakdown in his relationship with vice-chairman Ehab Allam.
Despite taking charge of a club in turmoil and already regarded as relegation certainties due to a chronic lack of signings and a wafer-thin squad heavily depleted by a series of long-term injury problems, Phelan instilled a sense of confidence that led to Hull, who had just 13 senior players fit and available, upsetting defending champions Leicester on the opening day of the season.
Further wins over Swansea and Exeter followed and the former Manchester United stalwart was later rewarded for his efforts by being named as the top-flight's manager of the month for August. A permanent deal was presented in mid-September and Phelan confirmed it was now a case of "sifting through the offer and getting down to what hopefully will be further discussions".
He refused to discuss specific details concerning that contract offer, although matters appeared to be complicated by conflicting rumours of an impending takeover by a Chinese consortium. While the issue of future ownership is yet to be resolved amid reports that the club's asking price has risen to £120m ($146m) with four parties now believed to be interested, supporters will be relived that Phelan's position has finally been clarified.
"It's been a while in coming, but I'm happy with the position I am now in and looking forward to the challenge ahead," he told Hull's official website after confirmation of an agreement that The Guardian believe to be worth £1.5m over the next 12 months. "It has taken time but things have to be done correctly with these matters. What is important now is that we move forward and help this squad of players be successful for this football club.
"It's exciting to step over that threshold into management, and I'm looking forward to working with this group of players that has done so well so far. The support I have received from everyone has been magnificent and I want that to continue because the challenges ahead are huge. The fans have been excellent through the last few months and the players have given me their full backing. I'm looking forward to what is to come now so roll on the next few games."
Despite that surprisingly impressive start, Hull, who did eventually boost their numbers with seven new signings before the close of the transfer window including the likes of Ryan Mason, David Marshall and Markus Henriksen, are without a victory in their last six league matches and have conceded 11 goals in three consecutive defeats to Arsenal, Liverpool and Chelsea.
In addition to stopping that rot, one of Phelan's first tasks will be to seek a replacement for highly-rated first-team coach Stephen Clemence, who left the KCOM Stadium in order to reunite with Bruce following the latter's appointment as successor to Roberto Di Matteo at Aston Villa. Goalkeeping coach Gary Walsh has been linked with a similar move.