Saunders appointed Toshack's No2

The former Liverpool, Aston Villa and Derby striker, who won 75 caps for his country, replaces Salvador Iriarte, who has taken over as Real Sociedad's new technical director in the wake of their relegation from La Liga.

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Swansea-born Saunders, 43 last week, was one of the unsuccessful candidates for the Wales job when Toshack was appointed in November 2004, and would now become a serious contender for the job when Toshack's reign ends.

Toshack, with two-and-a-half more years on his contract, has already intimated that he would consider an extension if his re-building plans were beginning to bear fruit in the future, but at 58 he may well be prepared by then for an overseeing role.

Saunders, who started his career under Toshack at Swansea and also worked under Wales coach Roy Evans at Anfield, is seen as an excellent bridge between the Toshack era and the current crop of young players.

He said: "I am really very proud and excited to be given this opportunity.

"I have been brought in to help, but I also expect to learn a great deal from working alongside John and Roy.

"I was always honoured to wear the Welsh jersey and I know I will get the same feeling by being a part of the coaching team and helping John build his side for the future."

The Saunders appointment comes at the end of a week that has seen Toshack heavily involved in the restructuring of his former club, Sociedad, who were relegated from the Spanish top flight for the first time in 40 years last weekend.

Toshack was initially linked with the manager's job in San Sebastian, but made it clear he wanted to continue his job with Wales.

But his Wales assistant Iriarte has taken up the technical role with Sociedad and has decided he will not be able to continue with his Wales duties.

And Toshack has also recommended Chris Coleman as the new manager, a job the former Fulham man accepted this week. Toshack will become an advisor to the club.

All that activity in the Basque country, where Toshack still lives, has created the opportunity for Saunders, who has not worked in club coaching since leaving Newcastle.

Iriarte wanted to combine working for Sociedad with Wales, but it has become clear that this will not be possible, especially as Sociedad's matches in the Spanish Second Division will clash with the international calendar dates.

Iriarte will assist Wales for the final time in August by watching the England friendly with Germany at Wembley, and prepare a report for Wales' Euro 2008 clash with the Germans on September 8.

Saunders comes to the post having had coaching experience at Blackburn and Newcastle and has recently been completing his Pro Licence qualifications, allowing him to work at the highest levels for club or country.

As a player, he won 75 caps for Wales between 1986-2001, scoring 22 goals. His nomadic club career started at Swansea and then took in spells with Cardiff, Brighton, Oxford, Derby, Liverpool, Aston Villa, Galatasaray, Nottingham Forest, Sheffield United, Benfica and Bradford.

During his career he made almost a 1,000 senior appearances, notching nearly 300 goals. He won an FA Cup winners medal with Liverpool in 1992 as well as a League Cup winners medal two years later with Villa.

Saunders will link up with the Wales squad for the first time in August when the side has a friendly in Bulgaria as preparation for the Euro 2008 matches with Germany and Slovakia in September.