The Blades are hunting for a new man to take charge of the academy after Ron Reid joined Hungarian side Ferencvaros a few months ago.
Klug, 49 was an important part of the Portman Road's academy system - he was appointed in 1998 and would have been highly influential in developing players such as Darren Bent who went onto make a successful career at top flight with Charlton Athletic, Tottenham Hotspur and now Sunderland as well as representing England.
He would have also seen Darren Ambrose, Titus Bramble, Keiron Dyer and Richard Wright all go onto have fruitful careers after serving the Blues youth academy.
Following the appointment of Jim Magilton as manager Klug was installed as assistant manager in 2006 but left the club a month ago were he was reserve team manager.
As a player the Coventry born midfielder served Ipswich Town, Wimbledon, Chesterfield and Peterborough United between 1977 and 1985 (also Chelmsford City), making around 84 Football League appearances and scored four goals.