Alan Stubbs has made the former Scotland Under-21 player David Gray his first signing as Hibernian's head coach.
The 26-year-old, who was on the books of Hearts before joining Manchester United in a £50,000 deal as a teenager, has penned a two-year contract.
Gray, a right-back, said: "Being an Edinburgh boy, I fully understand what the club is all about."
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Gray made just one appearance for United, in a Carling Cup win against Crewe in 2006 before being farmed out on loan to Crewe and Plymouth. He then joined Preston North End, playing 52 games in two years before spells with Stevenage and Burton Albion.