Steven Gerrard will return to Liverpool next month to take up a full-time coaching role with the club's academy.
The former Liverpool captain will be based at the club's youth complex in Kirkby, helping the professional development of their young players.
Gerrard, who turned down an offer to become MK Dons manager in November, has been a regular presence at the Reds' academy since retiring from professional football and believes returning to the club he represented for 17 years is the right step for him.
"It feels like completing the circle; returning to the place where professionally it all began," Gerrard said. "However, this isn't a decision based on emotion - it's about what I can offer and contribute to Liverpool.
"I don't think I need to explain to people what this football club means to me, but when I knew coming back was a serious option I wanted to make sure it was a substantive role and a role in which I could really help the organisation."
Jurgen Klopp had said the "door is always open" for Gerrard to return in a coaching capacity, outlining the club wanted to help him transition into the new career if that was his preferred choice.
Gerrard will now work under the stewardship of academy director Alex Inglethorpe, who signed a multi-year contract with the Merseyside club in November.
"Meeting with Alex Inglethorpe, seeing the work they are currently doing and want to do in the future at Kirkby, it just felt right," Gerrard added. "The right option at the right time, for all parties involved.
"This gives me a great opportunity to learn and develop as a coach, while at the same time offering my knowledge, ideas and experience to the young players at an important period of their development."
Inglethorpe believes there was only one place Gerrard wanted to be, despite a number of attractive offers from elsewhere.
"If I was to pick one individual who embodies the characteristics and values we are looking to instil into our organisation at Kirkby it would be Steven Gerrard," said Inglethorpe. "For him to have been so enthusiastic about being part of what we are looking to do is simply great news for everyone connected to the club.
"I don't think it would surprise anyone to know that Steven has had a host of great options, in terms of what to do next in his career, including playing, management and coaching. But it's been evident from the first meeting with him that his heart and head belongs here.
"He has shown great humility in making it clear from the outset he wants a role where he can contribute to Liverpool; it's typical of him that his priority has been defining the role so it helps the club, ahead of himself.
"He has expressed a desire to learn from us and manage a young team. The benefits to us will be immense. This is a substantial role and one which makes the Academy and the club in general stronger and better."