The 37-year-old was replaced as boss of the Tractor Girls by former Town defender David Wright last week, with the side sitting bottom of WSL 2.
READ MORE: Town’s young guns progress to the last 16 of the FA Youth Cup with away win
Joe Sheehan led the club to the FAWNL Southern Premier Division title last season. (Image: Ross Halls)
Sheehan, who has been at the club since October 2017, had been in charge of the Blues since February 2019 and guided the club from the fourth to the second tier for the first time.
He will now remain with the Blues in the role of head of player development and pro game academy manager.
The new position will see him leading the elite pathway for U18 and U21 girls, with the aim of progressing them into the first team.