Welsh has left his job as manager of Unibond League side Spalding United to take up his post at York Street.
The 37-year-old, who also played for Peterborough and Ayr United, will work with the first-team squad and Boston's in their centre of excellence.
"I am delighted Steve has agreed to join us. He has great credentials and I look forward to working with him," boss Steve Evans told Boston's website.
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