Ann Budge appoints Robbie Neilson as the new Hearts head coach
The former defender will assume day-to-day running of the first team.
Robbie Neilson will take over the day-to-day running of the Hearts first team under the new management structure at Tynecastle.
The Scottish Cup winning defender moves from his role as the club's Under-20s coach to work under director of football Craig Levein.
Neilson, 33, returned to Tynecastle last year in the youth role he inherited from previous Under-20s boss Darren Murray, and had been helping ex-Hearts boss Gary Locke with first team duties on match days.
Mrs Budge told the official Hearts website that the club would now look to appoint an assistant and new Under-20s coach to work with Neilson.
She said: "We know it may be an unpopular decision with some of you, but the board has decided that we cannot offer Gary Locke a new contract as manager, at the end of his current contract.
"Please believe me when I say this has been an enormously difficult decision to make. We all know the pressures that Gary and his assistant, Billy Brown, have worked under over the last year.
"They were set an almost impossible task, which they handled with dignity and determination. For that, we are all hugely grateful to both of them.
"The players and backroom/support staff at Riccarton will be sorry indeed to see them go, as, I know, will a very large section of the Hearts support.
"The new board believes that we need to bring in someone with Craig's experience to guide that vision. With such a strong director of football on board, we feel we have to spend our limited resources on strengthening and building the coaching side of the business, rather than having a first team manager.
"Robbie Neilson will take over as head coach for the first team and we will bring in a strong support team to work with Robbie in terms of an assistant coach and Under-20s coach."
Neilson played for Hearts from 1999 to 2009, winning the Scottish Cup in 2006 with the team. He earned his only Scotland cap that year, in the national side's match against Ukraine in Kiev.
He joined Leicester City in 2009 and spent time at Brentford, Dundee United, Falkirk and East Fife before hanging up his boots in August to take up coaching full time.
John Murray, who had been the director of football with Hearts, reverts to his old role of chief scout, as well as taking an interest in the running of the club's youth academy."