For the former Rovers captain is to assist Gary Bowyer in coaching the club's development squad.
Boss Henning Berg confirmed the role change this Thursday and he believes that Hendry's coaching qualities can help the younger players at the club
"I had a good meeting with Colin about ten days ago," revealed the Rovers boss.
"He was working with the first team but with three coaches, myself, Ian and Eric, actually doing practical things out on the training pitch would be limited.
"So for us to get the best use of Colin Hendry would be for him to work with Gary Bowyer in the Reserves and for him to work on the training pitch with our next best young players to come through.
"That way we can get more out of Colin working with these players than actually with the first team.
"I think that is the right decision and I think it is a good decision for Colin as well.
"Colin is very happy with this, we now have more of an input with our daily routine and how we do things, he was one of three other coaches with myself.
"I think it is much better for the young lads that he is working with Gary."