The 51-year-old former Port Vale and York City boss has been tasked with finding potential new signings at both first team and development squad level.
Manager Chris Wilder has backed the move as he looks to reduce the reliance on loan players ahead of potential changes to Football League rules.
He told the official club website: "As manager I have the final say on who comes in, but the job of Martin and his team of scouts is to identify and recommend players for consideration and we have made an excellent appointment."