Southampton chairman Michael Wilde told the club's website: "Since taking control of the club it has been a major priority to resolve the manager and coaching situation and to that end we had to look at the financial restrictions in which we're operating.
"Having established those, we held a meeting with Nigel which was extremely constructive and helpful and helpful.
"The board were impressed with what Nigel had to say and we are sure he will be a well respected manager in the future at whatever club he ultimately goes to.
"We are extremely grateful for Nigel's contribution. He came to the club in a time of crisis and through his hard work and commitment we were narrowly able to avoid relegation and we wish him well."
And Wilde added: "Bearing in mind the financial restrictions, the board have decided to implement a coaching structure which will optimise the potential of youngsters within the club."
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