The 42-year-old, who won 41 caps for Wales, will also take charge of the Under-17 and Under-19 teams.
Page had been first-team coach at Championship club Nottingham Forest after he was sacked as manager by League One side Northampton in January.
Wales Under-21 begin their UEFA Under-21 Championship qualifying campaign in September.
During an 18-year playing career, Page made over 500 senior appearances for clubs such as Watford and Cardiff City.
Page succeeds Geraint Williams, whose contract was not renewed by the Football Association of Wales when it expired last year.
Williams, a former Derby and Ipswich midfielder, had been in charge since 2012.
Former Wales centre-back Robert Page has been appointed Wales' new Under-21 manager on a four-year contract.