Koeman finished his playing career with Groningen in 1998 and became youth coach at PSV. In October 2001, he was promoted to assistant manager under Eric Gerets, and for the 2004–05 season became manager in RKC Waalwijk. He managed RKC for one season before moving to Feyenoord. In March 2006, he extended his contract to the summer 2009. However, on 3 May 2007, Koeman announced his immediate resignation due to motivational problems, after a troublesome season, where Feyenoord eventually finished seventh.
Before the season Eredivisie season of 2011–12 was he appointed as the new manager of FC Utrecht. However on 18 October 2011 he quit the job citing bad working conditions and frustration after several key players had been sold.