The full-back made 10 starts for the Red Devils during the 2015-16 campaign after being handed his debut by Louis van Gaal, and will look to gain further first-team experience in Germany.
The 23-year-old, who had previously spent a year on loan at Real Madrid's Castilla team in 2014-15, featured in Jose Mourinho's first game in charge of the Premier League last week when they beat Wigan 2-0 in a friendly.
However, the Uruguayan right-back was left out of United's squad for the International Champions Cup campaign in China and will spend the 2016-17 campaign on loan in Germany.
"I look forward to being in Frankfurt with the team and the stadium," Varela told the club's official website. "I've seen a few games in the Bundesliga on television and was impressed by the mood of the fans."
Frankfurt's sporting director Bruno Hubner added: "Guillermo Varela is a very talented young player who has proven his qualities already in two absolute top clubs."
Eintracht finished third bottom of the league last season but rescued their top flight status by beating Nurnberg 2-1 on aggregate in the relegation playoffs.
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