Tugay is to join Mark Hughes' coaching staff at Manchester City, according to the former Blackburn star.
The 38-year-old worked under Hughes when the former Wales international was in charge at Ewood Park.
"I made an agreement with Manchester City and will work as a coach," Tugay is reported to have told Turkish TV station NTV. "To work there will be a huge step for me. When I feel strong enough, then I will begin to work as a technical director."
Tugay brought an end to his playing career at the conclusion of this season.
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