Earlier reports suggest Merrick beat former Blackburn Rovers manager Steve Kean for the job.
Jones, who oversaw a woeful late-season collapse to seal the wooden spoon, was the third first-year A-League coach to be dismissed in as many years.
It led Jets chief executive Lawrie McKinna to highlight the need for an experienced head coach to haul the club out of the doldrums.
McKinna said Merrick's A-League experience and record stood out from a large pack of highly credentialed candidates.
"At this point in the club's development we believe it is crucial that someone with a deep understanding of the Hyundai A-League both on and off the pitch takes charge of our first team and football department," McKinna said.
"Ernie brings this in spades, and not only the first team but everyone associated with the club should benefit from his knowledge, experience, and winning mentality in some way."
The Jets have signed Central Coast striker Roy O'Donovan, and Melbourne Victory defender and Joe Marston Medallist Daniel Georgievski, but still have 10 players off contract.
"I believe that the club has all the necessary ingredients for on-field success with a strong core of good quality players, a very competent staff, excellent facilities, and most importantly a wealth of extremely passionate fans," Merrick said.
- AAP
