The Spanish outfit parted ways with Juan Carlos Garrido after crashing out of the Copa del Rey against Segunda Division B side Mirandes on Wednesday.
And according to the club's official website, Molina will replace Garrido as the new coach of Villarreal.
The 41-year-old, a former Spain international goalkeeper, was previously in charge of the club's second team.
He represented Villarreal, Atletico Madrid and Deportivo La Coruna during his playing career before returning to Yellow Submarine to coach the club's third team.
His first official game in charge would be against Valencia on 8 January.