Watkinson has been cricket manager at Old Trafford for seven years
Lancashire have confirmed they are hunting for a new first team coach after moving Mike Watkinson to a new role as director of cricket.
Watkinson, an old-style cricket manager for seven seasons, had been viewed as having too wide a role - and Lancashire hope the restructure will pay off.
Lancashire chairman Michael Cairns said: "Over the last 12 months, there has been a modernisation at the club."
Chris Adams, a hot tip for a similar role at Surrey, could be the new coach.
According to Sussex's Evening Argus, Adams was due to be called in for a second interview at The Oval on Wednesday. The newspaper said he had not been contacted by Lancashire.
The former Sussex captain has a year left on his current contract at Hove, but BBC Sport understands the county is willing to release him.
It doesn't mean I will be trading the tracksuit for a business suit - I will still be coaching and continuing to do many of the things I've done before
In a statement released by Lancashire on Friday, Cairns went on: "The logical step was to appoint a director with specific responsibility for all cricket aspects of the club.
"With his long-standing association with the club and his knowledge of all aspects of cricket in the county, Mike Watkinson was seen as the ideal person to fill this role.
Watkinson said: "County cricketers are now full-time professionals and require more time, more resources and more structure than ever before to help with their own development and performance.
"This is a good opportunity for me to spread my involvement through different areas of cricket within the club and the county. It doesn't mean I will be trading the tracksuit for a business suit - I will still be coaching and continuing to do many of the things I've done before."