He returns to Vale Park where he was a playing hero in the 90s.
But it leaves Gateshead without a boss and chairman Richard Bennett says the club were powerless to prevent him returning to a club which is so close to his heart.
He said: “He’s an ambitious person and we couldn’t stand in his way of managing a Football League side where he is held in such high regard.
“There has been continued interest from clubs interested in acquiring Neil’s services as manager since he arrived at Gateshead almost two years ago.
“That is the calibre of manager he is and we will now look to ensure that we appoint a manager who is right for the club and matches our ambitions of reaching the Football League.
“For the time being, Micky Cummins will take charge of first-team affairs ahead of this Saturday’s match against Bromley.
“Finally, we would like to thank Neil for his services for the club and wish him the very best for the future.”