Barker was youth team coach at Bury, then elevated to first-team coach when Knill left to become Iron manager in April 2010.
He got the Shakers over the line, sealing automatic promotion to League One and kept them in the division last year. It included a memorable win over his former boss at Glanford Park.
But he too has now moved on from Gigg Lane, accepting an offer from the Red Devils to replace Sean O'Driscoll.
Aldershot boss Dean Holdsworth, Sheffield United's youth academy director John Pemberton and Oldham manager Paul Dickov were all sounded out by the Sussex side but told them they were not interested.
Peter Shirtliff has been appointed caretaker boss at Gigg Lane, with Ben Futcher acting as his assistant.
"The board of Bury FC would like to make clear that after having spent many hours over the weekend speaking to Richie in an attempt to convince him to stay; it became clear that the primary factor in Richie’s decision to leave was his desire to be closer to his young family on the South Coast," said the Shakers.
"Richie has asked us to put on record his sincere gratitude to everyone associated with the club, and especially Shakers supporters that have supported him throughout his time as our manager.
"On behalf of everyone at Bury FC we would like to thank Richie for his time at Gigg Lane, and the huge part that he has played in seeing us gain, and establish, ourselves as a League One outfit."