Lancaster will become the RFU's head of elite player development – a wide-ranging, powerful position in which he will be responsible for the development of all England-qualified players below Test level.

After two years in charge, Lancaster leaves Leeds as he found them: relegated from the Guinness Premiership. However, the club are in a far healthier position than they were when Lancaster succeeded Phil Davies and inherited a squad of just seven senior players in May 2006.

Almost all of the best players of the current squad have been retained for next season and with several new signings either confirmed or imminent – funded by their parachute payment – Leeds are strong favourites to win promotion from National One.

Although re-establishing the club as a force in the top-flight remains an immense challenge, chief executive Gary Hetherington expects a high calibre of applicant for the vacant director of rugby post.

"We have got a lot of attractions for aspiring directors of rugby," he said.

"We've got a perfect coaching environment, terrific support from (majority owners) Leeds Metropolitan University, great facilities and a beneficial link with Leeds Rhinos."

Hetherington stressed that Leeds had wanted to keep Lancaster, and voiced his 'disappointment' with the RFU for not discussing the 38-year-old's application with the club.

Among the front-runners to succeed him is former Rotherham coach Andre Bester, who had been set for a forwards-coaching role alongside Lancaster; the South African led the Titans to second place with a part-time squad last season, but has been concentrating on business for the last 12 months.

Bester, understood to be interested, has a proven record at National One level in recruitment, in getting the best out of players and in making a team greater than the sum of its parts, but he would have to convince Leeds that his reputation for being difficult is unmerited.

Davies, who took Leeds into the Premiership and kept them there for five years, twice qualifying for the Heineken Cup, is available, having been sacked by Llanelli.

Overall, his 10-year tenure at Leeds was a success, but the state he left the club in would surely count against him.

Harrogate-based Jon Callard, Davies's No 2 for three years until 2005 and now England's kicking coach, would be an option if new Test coach Martin Johnson does not want him.

Leeds may have to go for someone currently working as a No 2 or even No 3 at a Premiership or Super 14 club.

Plenty of recently-retired internationals are looking to get into coaching and some elements on the Leeds board are thought to want a 'big name' to rally supporters and help attract star players; other directors would prefer a less risky appointment, given the huge importance of winning promotion next season – if they fail, their central funding would go down from £1.5m to £200,000.

Leeds are hoping to have a new man in place by the start of July.

Lancaster is ending a 16-year association with Leeds, where he served as player, academy manager and director of rugby.

"It has been a very difficult decision for me," said the former back-row, who rebuilt the team and won promotion in his first season, but was unable to stave off relegation in this campaign.

"I can think of no other role I would have left the club for. However, this is a once-in-a-lifetime opportunity which allows me to work and coach at the top end of the international game, developing senior and young players to play for England."

The RFU were particularly impressed with Lancaster's record of nurturing talent during his five years running the Leeds academy, rated the best in the country.

Rob Andrew, the RFU's director of elite rugby and Lancaster's new boss, said: "Stuart will be directly responsible for all the administration and elite player development processes relating to the National Academy, the 14 regional academies and our links through the community schools of rugby, which help identify young talent from the age of 13.

"He will also be responsible for the overall management of the Under-18, Under-20, Sevens and Saxons representative sides, as well as bringing a wealth of coaching experience across the programme."

The RFU are still waiting to hear whether Brian Ashton will take up the offer of a job as head coach of the National Academy; if he does, the sacked England coach will effectively be answerable to Lancaster.

His last game at the helm at Leeds will be on Saturday when his side host title-chasing Wasps.