Danny Wilson appointed Peter Shirtliff as his new right-hand man earlier this month but Byrne has decided to stay on with the League One outfit in a role that involves the centre of excellence, youth and reserve-team football.
Chairman Andrew Fitton told the club's official website: "Swindon has long had a reputation for finding and successfully developing young players though, too often in the past, they have either slipped through our fingers or been sold in order to meet financial rather than football objectives.
"Clubs at all levels below the Premier League have to see themselves as development clubs - finding and developing players who will hopefully represent STFC at The County Ground for a period of time, but who may move on to a higher level.
"David Byrne, in his time at Swindon Town, has shown himself as having real talent in this area having been crucially involved in the identification and development of players such as Ben Tozer, Sean Morrison and Callum Kennedy and in the recruitment of players such as Simon Cox.
"We have been planning this re-organisation for some time and I am delighted David has accepted the role - he was the natural choice."