Shaun Edwards has officially signed a new four-year contract with the Welsh Rugby Union to remain Wales' defence coach until the 2015 Rugby World Cup.
He had been linked with a similar role with England, but Edwards will now remain Warren Gatland's assistant.
"I'm delighted for Welsh rugby, for the team of coaches and I'm delighted for Shaun," said WRU chief Roger Lewis.
Edwards will also be part of the WRU national academy system to "pass on his considerable expertise".
Lewis added: "He has proved himself as a coach at the very highest level and we know what huge respect and affection he is held in, not only by the players but also by the Welsh rugby public.
"Our whole focus must be building on that and looking to the future. That is why the appointment of Shaun Edwards is so important."
Cardiff Blues chairman Peter Thomas wants Edwards to become their part-time defence coach in a club and country job share.
But the move for Edwards does not now seem likely, as there is a chance he will maintain his involvement in England's Premiership with a part-time role at another club.
Edwards has been strongly linked with a move to Leicester Tigers.
"Shaun really gets switched on and motivated by weekly rugby and he wanted to keep a link with the English Premiership," WRU group chief executive Lewis confirmed.
"He's currently in negotiation with an English club. He won't leave the Wales camp in Test week, but there will be an opportunity for him to keep his hand in with the Premiership."
Wasps had been Edwards's main employer with his part-time Wales role allowed only under the sufferance of his club, but now the WRU will be his main employer and his Wales duties will take precedence over any additional work.
That work will include working with Wales' rising talent and at Welsh Premiership clubs.
Lewis added: "We've managed to secure some additional things with Wales with Shaun, not only extending his time with the national team, but also most importantly working with our national academy, working with our 20s, 18s and our 16s.
"Because those guys will be featuring in a Welsh squad in 2015 [World Cup]."
Edwards helped Wasps win two Heineken Cups and four English Premiership titles in his 10 years at the club before he left.
The former Great Britain rugby league international had admitted he would consider a coaching role with England in the wake of their disappointing World Cup campaign.
But since Edwards became Gatland's right-hand man in January 2008, on a part-time basis due to his Wasps commitments, Wales have won the 2008 Grand Slam and finished fourth at the 2011 World Cup.