Crewe Alexandra legend Dario Gradi has stepped down after 1,404 games as manager to concentrate on the academy.
Assistant manager Steve Davis will take control of first-team affairs.
Gradi, 70, was appointed as manager in 1983 and spent 24 years in charge, before two years as technical director and another two as manager.
He was booed by a section of the home supporters following a result that leaves them 18th in League Two.
Gradi, who will remain in his role as director of football and board director, won four promotions during his time in charge of Crewe.
He was also responsible for producing a number of players who would go on to be internationals, including David Platt, Geoff Thomas, Neil Lennon, Rob Jones, Robbie Savage, Danny Murphy, Seth Johnson, David Vaughan and Dean Ashton, bringing in around £25m for the club.
Following the defeat by Torquay, Gradi insisted the fans would not drive him out, saying: "I shall hand over when it suits or when somebody else tells me that it's time to go. It certainly won't be because of the supporters."
And they also lost his final game in charge, Tuesday's 3-1 defeat at Oldham in the Johnstone's Paint Trophy.
But he now hands over the reins to 46-year-old former Northwich and Nantwich manager Davis, who played under Gradi at Crewe between 1983 and 1987.
Davis will be assisted by Neil Baker, who has been at the club for 17 years as assistant manager, coach and scout.
The move around is down to changes in the way Football League academies will work. The Elite Player Performance Plan means the tribunal system will be abolished, meaning lower league clubs could receive lower fees for their players under 17.
A club statement read: "The Football and Premier Leagues have published plans aimed at furthering developing youth development programmes at clubs.
These plans will have significant impacts on clubs both financially and organisationally.
"The Crewe Alexandra board believes that youth development should still be a major investment for the club and intends to exploit any opportunities arising from such changes, despite the challenges it will face.
"As a result, Dario Gradi will hand over first-team manager responsibilities to Steve Davis, and concentrate on the future development and direction of the academy."