The former Sunderland and England striker, 48, has openly put his name forward for managerial roles in the past and has finally received an opportunity with the Northern Premier League club.
Fenton joined the club in September 2016, meaning it was a difficult decision for South Shields chairman Geoff Thompson.
"It happened fairly quickly,” said Phillips, who scored 130 goals in 235 appearances for Sunderland as a player between 1997 and 2003.
“I had a message / phone call from Geoff saying would I be interested in a position that is possibly going to come up.
“This happened at a time when I was out and about so it was a bit of a surprise but once I thought about it I said yeah I’m willing to have a chat.
“I thought about it and the prospect of coming back to the North East which was always an ambition of mine.
“Then when I spoke to Geoff in terms of what he’s done with the club, where he wants to take it and the money he’s invested. He’s South Shields through and through and loves the football club.
“It just felt right and of course from a selfish point of view I always wanted to have a crack at management so I’m not going to deny that."
Some may question how Phillips will cope with the challenges of non-league, yet the former striker did start his career playing for non-league club Baldock Town
“To be given an opportunity I’m truly thankful to Geoff and ultimately it is a gamble,” Phillips added.
“I’m sure the questions will come thick and fast, ‘you don’t have managerial experience, you don’t know the league.’
“For me that is clearly bordering on a nonsense question because I can quickly reel off the names as we all know that chairmen have taken a risk on, Frank Lampard at Derby, Wayne Rooney now and Stevie G. I’d like to say they have done a fairly good job without any experience.
“In terms of the league, football is football. You still play with a white ball and have two goals at each end.
“It doesn’t matter what league you are playing in, you have to adapt. I’ve been in non-league and I’ve played there so I know what to expect.”
When asked if he’s had other offers to become a manager, Phillips replied: “No. Again when I spoke to Geoff I’m extremely grateful because I have put my name forward.
“I’m not going to deny I did put my name in the hat for the Sunderland job when Phil Parkinson left and put my name in the hat for a couple of other jobs.
“It’s trying to get through the door and to even get an interview is extremely hard nowadays because there are so many managers who are on that merry go round.
“For a chairman it is entirely up to them and if they feel that is that is the right way to go.
“You know Sunderland have tried it over the years and they are still in League One, and they’ve had so many managers with experience.
“I think there comes a point where you have to give credit to Geoff for giving me an opportunity and I know one thing is for sure, I will give it 100 per cent and I don’t want to let anyone down.
“I’m determined to succeed here that’s for sure.”
Phillips says he has learnt a great deal from the various managers he has worked with and played under, in particular former Derby boss Paul Clement.
But while Phillips will draw on previous experiences to try and succeed, he also wants to implement his own style.
"For me I have to quickly find out what makes players tick,” he added.
"That is by talking to the staff and players individually, making them feel good about themselves.
“The environment I’m trying to create is that when we wake up in the morning I want those players to look forward to coming into work and getting on the training ground and enjoying the sessions.
“That is my immediate goal because if you don’t create that, players don’t run as hard, they don’t work as hard, they don’t sprint as hard.
"If I can get them to do that and create an environment like that, not just at the training ground but at the stadium as well, it will be amazing what players will do for you.”
Phillips will work alongside Jon Shaw and Wess Brown, who were already in coaching roles with South Shields, at 1st Cloud Arena.
There has been talk Phillips will bring former Sunderland team-mate Gavin McCann to the club to assist him, yet the main priority is preparing for Saturday’s match against Warrington Town.
“I think it’s something I’ll look at but in the immediate future is to work with the lads that are here,” he explained.
“We have some good coaches and Wess has stepped up. I have been very impressed with what they have said already.
“We had a good meeting here last night and I have been at the training ground with them this morning. They are excited about us getting going.
“At some point I will look at it but that’s not a priority, the priority is preparing for Saturday and then Tuesday.
“They are going to come thick and fast.”