Powell led the Rhinos to the Challenge Cup final in April
Daryl Powell will step down as Leeds coach at the end of the season - and be replaced by Huddersfield's Tony Smith.
Powell will not sever his ties with the Tetley's Super League leaders after agreeing to become director of rugby at Headingley.
Smith announced last week that he would not be renewing his Giants contract, which is set to run out at the end of 2003.
Bizarrely, the Australian will coach the Rhinos in 2004 and 2005 before handing the reigns back to Powell.
"This will be seen as unconventional - and I can understand people being puzzled - but it is part of our desire to develop excellence throughout our organisation and to plan for the future," said Leeds chief executive Gary Hetherington.
Powell will be responsible for all aspects of coaching as well as elite player development outside of the first team.
He will also develop his own coaching skills by exploring new coaching methods and spending time with "experts in world sport", according to a club statement.
Smith said: "I realise there are great expectations at Leeds and I am happy to try and fulfil that with the squad of players we have available."
Hetherington added: "Daryl is a key member of our organisation and this is a revolutionary role we have been able to create.
"During our discussions with regard to his new contract we both became aware of a need to provide an opportunity for Daryl to realise his full potential as one of the best British coaches in the modern era.
"Daryl and I discussed the possibility of a director of rugby role but this was dependent on identifying a suitable candidate for the first team coach position.
"However, once we became aware of Tony's availability we both agreed that he
had exactly the right credentials to take the club forward for the next two seasons and after meeting him we had no hesitation in offering him the position."