Bill Sweetenham has agreed to take a less hands-on role with Britain's top swimmers despite being cleared of bullying by an independent inquiry.
The national performance director has held talks with British Swimming chief David Sparkes to discuss his future.
And following Friday's meeting, Sparkes said the Australian, 55, will no longer work one-to-one with any swimmers.
"We've had a very positive meeting," said Sparkes, who added that Sweetenham was committed until the 2008 Olympics.
Sweetenham's position came under scrutiny following claims in The Times newspaper last August that his behaviour had contributed to the retirement of 13 British Olympians.
But following a three-month investigation by former police officer Bill Roberts, the Queenslander was cleared of any major wrong-doing.
"We agreed, in hindsight, that some of the issues highlighted in the report could have been handled better," said Sparkes.
"But at the end of the day, Bill has affected a massive change in our sport and it's inevitable that not everything will run smoothly.
"British Swimming, team staff, and the vast majority of Britain's swimmers remain committed to Bill and are looking forward to more success than they've already achieved as they continue on the road to Beijing."
Sweetenham's robust style has provoked mixed opinions among Britain's international swimming fraternity.
And Commonwealth gold medallist Karen Pickering, now retired, criticised the inquiry into his handling of the counttry's top swimmer, claiming it was a "pointless exercise" that failed to address all the issues raised.
However, Sweetenham has a number of supporters, among them British swimming great Sharon Davies, who believes the Australian's methods will reap dividends at the 2008 Games.