Nelson Vivas has been added to Atletico Madrid's coaching staff.
Marca says Tiago will depart the club, a year after he joined having hung up his boots as a player.
The Portuguese former midfielder worked as an assistant, following matches from the stands, and is now looking for a new venture.
Acting quickly to bring in Nelson Vivas, the Argentine was previously an assistant coach with the likes of Racing, Estudiantes and River Plate as well as Catania in Italy.
The former right-back had an impressive career at Arsenal, Celta Vigo, Inter and Boca Juniors, starting and ending his career at Quilmes.