Walmsley has been appointed as Head of Academy Recruitment at Bramall Lane and will leave the Mariners in October four-and-a-half years after first arriving at the club.
The 2011/12 NYL championship coach will oversee Sheffield's scouting network, development centres, club partnerships and internal strategy and is delighted to be given the opportunity with the English League One outfit.
"Being part of the Mariners through the growth of the Hyundai A-League and the implementation of the NYL has been very rewarding," Walmsley said.
"I've had the privilege of working under two managers with two very different styles in 'Arnie' (Graham Arnold) and Lawrie (McKinna) and will take a lot of positive experiences with me.
"The opportunity to now add to Sheffield United's academy management team is one I feel compelled to take up.
"While they have serious ambition to return to the EPL the Club is focussed on its Academy and I feel well prepared for the challenges ahead."