Derakhshan started his club career with Persepolis. After playing ten years for Persepolis, he left the club for Qatar where he joined Qatar SC for which he played for four years followed by one season in Al-Sadd. Although he played for Persepolis on loan during 1990 Asian Cup Winners Cup when Persepolis won the title. He returned to Persepolis and played his last two years at Persepolis before retiring in 1994.
He started his coaching career, as coach of Persepolis in 1995. He also coached Iran national under-20 football team in 2001 but was sacked after it was discovered that he had been using overage players in his teams. He also briefly acted as an assistant coach to Branko Ivankovic in 2002. He was the technical manager of Persepolis from 2004 until 2008 and Paykan in 2008–09 season. He became the head coach of Paykan in summer 2009. He was appointed as Shahrdari Tabriz's head coach on 10 October 2010 and was sacked by club on 19 June 2011. He was appointed as Shahin Bushehr's head coach on 26 June 2011. He was resigned on 5 October 2011 but was re-signed with Shahin on 13 February 2012. He was resigned again after a series of the problem in the club that led team in the relegation zone and losing 2012 Hazfi Cup Final. On 21 September 2012, he was signed as new head coach of Damash Gilan but was sacked on 3 March 2013 after a series of bad results.