Dennis Wise has joined Newcastle in an executive position after he resigned as Leeds manager on Monday.
It is not clear exactly what Wise's role will be under new Magpies boss Kevin Keegan, who admitted: "I just do not know enough about it."
It is thought transfers, scouting and youth development - but not first-team affairs - will be overseen by Wise.
The surprise move is believed to be designed to create a new tier of management at St James' Park.
However, it could upset Keegan, who told BBC One's Inside Sport last October he felt that kind of structure is unworkable.
When Keegan was asked about reports linking him with a return to Newcastle as director of football under then-manager Sam Allardyce, he said: "It's absolutely impossible to give Sam a job at Newcastle and then go and fetch someone who is going to be some sort of threat, it doesn't work.
"Sam would be a fool to let it happen and the guy who goes in would be a fool to accept it.
"The chairman, who is not a fool, would be a fool to go and do it, too. It doesn't work."
"He's got a real good aura around him and it's nice to see him back"
It was expected that the exact nature of Wise's role would be clarified ahead of Tuesday's Premier League match at Arsenal, but Newcastle say they have nothing official planned.
On Monday, Keegan said he was "reluctant to tell all I know because I really do not know everything" about Wise's role but insisted he was "very happy" with the situation.
Former Tottenham director of football David Pleat expressed surprise at developments.
He told BBC Radio 5 Live: "Wise has never been director of football before, although he has been relatively successful coach at Millwall and was doing good work at Leeds.
"I would imagine it would be a completely new challenge for him and, I have to say, it is usually a challenge that is given to a more experienced man."
Gavin Peacock was also shocked by the appointment and believes his former Chelsea team-mate may be lined up as a future manager at St James' Park.
"I thought it would have been in a coaching capacity, but the director of football role surprises me," said Peacock. "I think ultimately he would want to be manager of a football club.
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"Maybe Kevin thinks he can start things and then maybe pass things on to him. I guess Kevin likes Wise and maybe has him lined up for that."
Theo Paphitis, who was chairman at Millwall when Wise was manager, believes Wise has been underestimated in his managerial career.
"He's disappointed that he's leaving Leeds as he's become fond of them, but it is an opportunity that he thought that he had to take," Paphitis told BBC Radio 5 Live.
"Dennis is underestimated intellectually. He was such a passionate player on the pitch that people assume that intellectually his is limited, but I can assure you he is not.
"I think director of football is probably a role he will enjoy."
Newcastle approached Leeds on Friday after former Newcastle striker Alan Shearer opted not to return to St James' Park as Keegan's number two.
Wise played for England under Keegan and is a big fan of his former manager.
After the shock appointment of Keegan a fortnight ago, Wise said: "I worked with him at England and he did a very good job there.
"He's a good man and all the people that have worked with him have enjoyed working with him. He's got a real good aura around him and it's nice to see him back."
Wise has only been at Leeds for just 15 months.
He arrived at Elland Road with the club already sliding towards League Two.
But, despite a 15-point penalty for going into administration at the end of last season, he has steered the club into play-off contention this term.
Wise began his managerial career as player-boss at Millwall, steering the Lions to the 2004 FA Cup final which they lost 3-0 to Manchester United.
Wise then had a brief spell as joint-caretaker boss of Southampton before taking over at League Two side Swindon, enjoying instant success before leaving for Leeds in October 2006.
Now he is destined for St James' Park.
It is the second time this term that Leeds haves lost a member of their managerial team to a Premier League club following assistant manager Gus Poyet's move to Tottenham.
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