Merrick was named coach and Muscat the captain of a Victory side packed with internationals.
The team, which includes current players Mark Milligan, Archie Thompson, Nathan Coe and Leigh Broxham, was announced at a gala dinner on Saturday night at Crown Casino.
At right-back, Muscat leads a defence of Rodrigo Vargas, Adrian Leijer and Adama Traore.
Milligan is joined in midfield by championship winners Carlos Hernandez and Grant Brebner.
The front three of Thompson, Danny Allsopp and Robbie Kruse have combined for 140 A-League goals for the Victory.
Merrick led the Victory to two championships before being sacked in his sixth season in charge for failing to make progress in the Asian Champions League.
Now in charge of A-League leaders Wellington, Merrick hosts the Muscat-led Victory next Sunday.
MELBOURNE VICTORY'S TEAM OF THE DECADE:
Coach: Ernie Merrick
Goalkeeper: Michael Theo
Defence: Kevin Muscat (capt), Rodrigo Vargas, Adrian Leijer, Adama Traore
Midfield: Carlos Hernandez, Mark Milligan, Grant Brebner
Attack: Archie Thompson, Danny Allsopp, Robbie Kruse
Substitutes: Nathan Coe, Tom Pondeljak, Marco Rojas, Leigh Broxham, Matthew Kemp