Lee (left) saw his role under Dalglish altered cuts 24-year tie with Liverpool five days before the first team returns for pre-season training.
Sammy Lee's three-year spell as Liverpool assistant manager has ended after he parted company with the Anfield club.
A popular figure among supporters and players alike thanks to his bubbly character and willingness to wear his heart on his sleeve, the 52-year-old returned to Liverpool in 2008 to become Rafa Benitez's number two.
Lee stayed on after Benitez left 12 months ago to assist Roy Hodgson and remained after the former Fulham manager was replaced by Kenny Dalglish earlier this year.
But even though he remained an integral part of the backroom set up, Lee's role altered slightly after Steve Clarke arrived to become Dalglish's right-hand man in January.
The parting of the ways will deeply sadden Lee, who won four League titles and two European Cups during his 10 years as a Liverpool player.
In total, the pint-sized midfielder made 295 appearances, scoring 14 goals before leaving for spells at Queens Park Rangers and Osasuna. He was also capped 14 times by England
Well respected within the game, Lee first joined Liverpool's coaching staff in 1993 when he received an offer from Greame Souness .
He worked his way up from coaching the reserve team to a place alongside Gerard Houllier and Phil Thompson during Liverpool's 2000-01 campaign which culminated in them winning a Cup treble.
Change for the better: Rafa Benitez produced a masterstroke by luring Lee back to Anfield
Lee became a part time member of Sven Goran Eriksson's set up in 2001 and joined permanently in 2004 after Houllier left the club.
A spell as Bolton's assistant manager followed in 2005 before he succeeded Sam Allardyce at the Reebok in 2007 and there is now inevitable speculation he will join Allardyce at West Ham.
It was a regarded as a masterstroke by Benitez to bring Lee back in May 2008 and he certainly played his part that season, as Liverpool finished runners-up to Manchester United in the Barclays Premier League.
When Benitez was confined to hospital after undergoing surgery to remove kidney stones, Lee became caretaker manager but never flinched, insisting at the time it was 'business as usual'. Shortly after that, he received a contract extension in March 2009.
There has been no comment on the matter from either Lee or Liverpool but the timing of his departure – five days before the first team returns for pre-season training – is a surprise.
After all, Dalglish was quick to heap praise on the way Lee and Clarke had helped him after he was made permanent manager in May.
Dalglish said at the time: 'The best way to get results is to get great people working with you and that's what we did.
'You identify your faults and bring in someone that's better than you at what you can't do and we've got a good chance. Stevie and Sammy are much better at what they do than what I could do for them.
'Steve has been fantastic, Sammy is still here and done a great job alongside him and the three of us work together. It works well for us.'
Next move: Could Lee be reunited with Allardyce at West Ham?
Steve Clark > Lee leh... lol
If only Chelsea got steve clark back.
There is nothing special about Steve Clarke lah... If he was indeed that good, he would have got a top job rather than be an assistant till today.
Some poeple seem to think Chelsea's success was partly down to him when in fact it was mainly Mourinho, Roman's hard cash and a weaker Permier league back then that made it happen... Mourinho was the driving force at Chelsea on the pitch and would have won the title even if he had a donkey by his side as they kind of won the league by Feb that season...
And also see what happen at West Ham? He kind of brought them down along with Zola... I mean they were not there by then but they kind of started the rot...
No.2 isn't really as important when we think of it... United have changed so many no.2 over the years, some have gone on to manage big clubs, some have even gone on to manage their countries, England, Portugal... But they continue to remain successful cos the main man is still the most important one, the no.2 is only a sidekick taking orders and not necessary able to make good decisions.
And if he is indeed that good as some seem to think he is... Ever wonder why no club not even non premier league sides have offer him a manager job before? At least Lee was a full manager of Bolton once... Also, the new Chelsea manager wasn't even a no.2 back then, to say it in another way, he was also Steve Clarke's assistant, taking instructions from him too and see where he is today?
So if you are really good, you will not go unnotice... On Clarke's case, I guess he is well known as a good ass.....t.
Too keen! Liverpool boss Dalglish has added the former West Ham coach (pic) to his backroom staff
Liverpool have appointed Kevin Keen as their new first team coach to fill the void left by Sammy Lee’s departure.
Former Chelsea coach Paul Clement and ex-Liverpool midfielder Gary McAllister had been under consideration for the role but manager Kenny Dalglish sprung a surprise by appointing Keen, who had three games in charge of West Ham last season.
Keen has signed a three-year contract and will link up again with Liverpool’s assistant manager Steve Clarke, with whom he worked at Upton Park.
He will start his first day on Monday, when Liverpool’s squad return for pre-season training.
Dalglish said: 'I’m delighted that Kevin is joining us to work alongside Steve Clarke coaching the first team squad.
New arrival: Dalglish (right) has signed Keen based on Clarke's (left) recommendation
'He has previously worked with Steve at West Ham and has a good reputation and a good manner about him.
'He is highly respected in the game and will be a great addition to our technical staff.'
Keen spent nine years on the coaching staff at Upton Park and was named caretaker manager on three occasions, most recently for the final game of last season, a 3-0 defeat at home to Sunderland.
He made over 600 appearances in spells with West Ham, Wolves, Stoke, Macclesfield and Wycombe.