The former midfielder, who has just retired after playing last season for Hajduk Split, will work alongside the club's sporting director Goran Vučević.
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There had been confusion over Rakitic's playing status after he had initially denied claims he would be retiring at the end of the season before hanging up the boots officially.
Upon his appointment, Rakitic stated: "I thank President Ivan Bilić and Sporting Director Goran Vučević for their trust. I want to help Hajduk: that's my only motivation.
"I'm ready to work with full commitment to help the club grow. I will offer my skills, experience, and contacts in the world of football. I promise the fans that the same sweat and dedication I showed as a player will continue in this new role."