In a statement, Cardiff said that they had made the decision to "re-structure [their] first-team coaching staff".
Slade, whose future was up in the air, has accepted the offer to become head of football, ensuring that "all football decisions remain in trusted and experienced hands".
Cardiff owner Vincent Tan told the club website: "I'd like to thank Russell for his efforts since his appointment here in October 2014.
"Since then, we have seen stabilisation and progression, both on and off the field. Crucially, he is a man who I have been able to trust.
"Russell's contribution has been significant, and I'm pleased that he's accepted this new position to stay at the football club. He will help us as we look towards the future and begin shaping our squad for the new season."
Slade will take charge of his final match against Birmingham City tomorrow, with the Bluebirds seventh in the table but with no chance of getting into the playoffs.