The 40-year-old, who was handed his Durham debut by Geoff Cook at just 17, will also continue in his role as bowling coach both at the Emirates Riverside as well as with the England and Wales Cricket Board.
Former seam bowler Killeen, who retired from playing back in 2010, will take up his new post in time for the start of the 2016 campaign.
“I see it as a great opportunity to enhance my coaching experience and work closely with some of the young players at Durham,” says Neil, who made over 350 first-team appearances for the club over a 15-year period.
“My bowling across the club will continue, but managing the second team will add another chapter to my story at Durham County Cricket Club.
“For me, the second team has always been hugely important because it provides that vital stepping stone before you move up to first-class level.
“It’s about developing individuals within a team environment. This club has always had a strong tradition of developing North-East players, and the more we can do that, the more that will help the club as a whole.”
With training well underway ahead of next month’s County Championship curtain raiser against Somerset, Killeen admits he’s genuinely excited by what he’s seen so far – particularly from a number of Academy players who have been thrown in at the deep end with the seniors.
And it’s developing those players and helping them progress through the ranks that holds great appeal for the former England Under-19 international.
“We’ve got a lot of strength at youth level,” he says. “For me, development is all about where a player started, where they’re at now, and how we get them to the next level.
“The more we can keep a close link to that the better, and right now we have a really good mix across all levels at the club.
“Taking on the new role allows me to tick another box in terms of my own development but, ultimately, my job is to concentrate on Durham and that’s always been my first priority.
“Even as recently as this morning’s practice session indoors, I was very excited to see a couple of the Academy lads training with the first-team because they genuinely didn’t look out of place.
“Those coming through from the Academy are an exciting group. There are lads who are definitely going to be first-team cricketers, but it’s up to them to work hard and identify the areas they need to put their efforts in to.
“It only takes a couple of stand-out performances and you can be in the second team.
“Jack Burnham did that, and in the case of Ben Stokes he practically bypassed the second string. That’s an exciting part of the role – getting players in, developing them, and moving them up to the first-team.”