Awford, who took charge of the Blues on a caretaker basis in March, has guided the club to 11th in the League Two table with just one game against Plymouth left to play.
Portsmouth, who have been dogged by financial issues over the last few years, secured five consecutive victories in a six-match unbeaten run under Awford.
"I have accepted the offer as I feel the club is, after a year of laying strong financial foundations, now in a position to look ahead, move forward, go from strength to strength and achieve the stability it craves," Awford told the club's official website.
"I genuinely believe that the club is now ready to progress and the opportunity to lead it is a challenge that I relish and am absolutely committed to.
"The rebuild won't be quick and simple, as unfortunately we are still hindered by the recent past, but the board have assured me that brick-by-brick, day-by-day, month-by-month, year-by-year, we will continue the good work that has been done this season and build a football club that we can all be very proud of for years to come."
Awford, who played for Pompey during his career, has worked for the club in a coaching capacity since 2011.