Former Wallaby prop Ewen McKenzie has taken on one of the "great challenges in Australian rugby" - the NSW rugby union head coach position.

McKenzie was offered the position on the spot at the end of his final interview on Wednesday, and was still to work out terms with NSW Rugby when his appointment was announced.

It's expected he will sign a two-year deal, and will start full-time work with NSW after the rugby World Cup, where he is involved as Australian coach Eddie Jones' right-hand man.

He will also continue as a national selector until the October-November tournament.

Until then McKenzie, who is Australia's most capped prop playing 51 Tests, will still be involved in recruitment and planning as he bids to improve on the Waratahs' fifth-placed Super 12 finish this year.

A number of key NSW players are off contract, including skipper Matt Burke, league recruit Lote Tuqiri, and Wallaby backrower David Lyons, who were awaiting Dwyer's replacement before making any decisions on their future.

The Waratahs have also targetted ACT lock Justin Harrison and exciting young utility Matt Giteau.

"It's been a long-held dream since I left the playing ranks to get involved in coaching," said McKenzie, who spent three years as an assistant coach at ACT.

"The Waratahs job is one of the great challenges in Australian rugby and I'm proud to get the opportunity.

"It's got the biggest player base and there's been a period of time when it hasn't been as successful as we would have liked."

Outgoing NSW coach Bob Dwyer, who coached McKenzie in the 1991 World Cup win, oversees his final Waratahs game on Wednesday night, against Samoa at Aussie Stadium.

In his three seasons Dwyer took the side to its first Super 12 semi-finals in 2002, however this year they produced some erratic performances to just miss the play-offs.

The position is considered somewhat of a poisoned chalice, with McKenzie the eighth coach since 1989.

But McKenzie said he preferred to look ahead, rather than at history as he sought to turn the under-achieving Waratahs into a Super 12 force.

"I think it depends on your attitude. I see that any job that I've undertaken I've always undertaken as a challenge.

"You've got to look for opportunities, to work hard on your weaknesses and capitalise and utilise your strengths."

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