The Bulldogs had been on the lookout for a new mentor since their messy split with Des Hasler a fortnight ago that could head to the courts over a payout dispute.
However, the club hasn't taken long to move on, announcing Pay as their new coach two days after he was interviewed.
"The Bulldogs have a great history and tradition and I'm looking forward to the chance to work with a talented group of players, where respect and discipline will be the cornerstones of how we go about our business," Pay said in a club statement.
Pay, 48, takes on more than your standard head coach role as the club searches for on-field success - the last of their eight NRL titles was in 2004, after losing the 2012 and 2014 grand finals.
There has been major upheaval at the end of the 2017 season with the Bulldogs parting ways with CEO Raelene Castle, skipper James Graham, and popular local junior Josh Reynolds, as well as Hasler.
It will be Pay's first role as head coach following an extensive apprenticeship.
He was assistant to Kevin Walters at Super League's the Catalans Dragons in 2009; then Under-20s coach with Melbourne under Craig Bellamy (2010-12), followed by assistant NRL coaching roles at Parramatta (2013) and Canberra (2014-2017).
Pay is also undefeated in five series with the NSW State of Origin U20s team.
Pay, a former Australia and NSW State of Origin representative, was part of the club's 1995 premiership which was his final game in seven years wearing the blue-and-white.
Pay will be tasked with lifting the Bulldogs back into premiership contention after they missed the finals for the first time in six seasons this year.
Big-name signings Aaron Woods and Kieran Foran are also expected to bring immediate change, offsetting the loss of Graham and Reynolds.