Walsall assistant manager Richard O’Kelly today joined Bristol City after a compensation deal was struck with the Robins for his switch to Ashton Gate.
City manager Sean O’Driscoll targeted long-term friend O’Kelly after he was installed as boss of the Championship strugglers.
The Saddlers had wanted to keep their former striker, who had rejoined the club as Dean Smith’s assistant last June.
But reports suggested the 56-year-old had expressed a desire to talk to the Robins after they made their move on Monday.
Walsall chief executive Stefan Gamble said: “Despite our best efforts to keep him here, it was evident the opportunity to work in the Championship and alongside Sean O’Driscoll was too good for Richard to turn down.
“Therefore, after lengthy discussions, it was felt that it was in the best interests of all concerned to allow Richard to take up this new challenge.
“We thank him most sincerely for his services to the club and wish him well in the future.
“The process of finding a successor has now begun and the compensation that we have received will be made available to the manager to fill the position and also strengthen the squad.”
O’Kelly returned to the Banks’s Stadium last summer, after turning down the chance to stay as Hereford manager following their relegation from League Two.
The former striker had originally left the Saddlers last March to take over at the Bulls after a six-month spell as Smith’s assistant.
Academy chief Neil Woods will be the first choice to step in to aid Smith in the immediate future, after helping the first team when O’Kelly initially left last year.
O’Kelly, who made 204 league appearances for the club, has helped Walsall to 10th place in League One and on course to comfortably secure survival.
But he had worked with Wolverhampton-born O’Driscoll at Bournemouth and Doncaster – guiding Rovers to the Championship in 2008.
He turned down the chance to join O’Driscoll at Crawley last summer, before O’Driscoll made the switch to Nottingham Forest without managing a game for the Reds.
O’Driscoll, who replaced sacked former West Brom midfielder Derek McInnes, made it clear he wanted to work with his own man after rejecting a number of options offered by the City board.