The Welshman has been appointed to a position entitled ‘Assistant Manager – Performance’ at Bramall Lane.
Owen had been with Gers since early 2007 and moves on with the blessing of Light Blues boss Ally McCoist.
Weir worked closely with him for almost five years in Glasgow and the two struck up a close relationship during that time.
Owen has now been reunited with the legendary former captain and will be tasked with trying to get his new side out of League One this season.
He returns to Yorkshire having worked there previously for the Blades’ city rivals Sheffield Wednesday, who the Scottish Third Division champions will face in a July 24 friendly at Hillsborough.
Owen, 32, said: “I’ve had seven fantastic years at Rangers and turned down other opportunities to work elsewhere to join David at Sheffield United.
“This is a big progression for me to come into a club the size of this as an Assistant Manager. The aim, alongside David, is to make sure we develop the club’s on and off-pitch progress.”
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