With the 49-year-old being under contract until 2027, the board have agreed an acceptable compensation package with Southampton for a deal that will also see assistant-manager Chris Cohen and coach Alan Sheehan (both pictured below) join the Saints.
Jones initially took over a Town side in the lower reaches of League Two in January 2016, leading them into League One and then returning from a spell as Stoke City manager to save the club from relegation back to that level in the lockdown period of 2019-20.
Last season, the Welshman continued his record of improving the club’s league position in every campaign he had in charge. He led Town into the play-offs with a sixth-placed finish – the highest since being relegated from the top-flight 30 years ago – and was named Sky Bet Championship manager of the season.
Jones departs with the Hatters once again in firm contention, sitting ninth in the table and two points off the play-off positions following his final game in charge at Stoke on Tuesday night.
Chief recruitment officer Mick Harford will take interim charge for Saturday’s home game against Rotherham United at a sold-out Kenilworth Road.
Hatters CEO Gary Sweet said: “We would like to thank Nathan for what he has brought to our club over 303 matches, which is the third most of any Luton manager.
“Together with his staff, and of course the brilliant group of players he has nurtured for the best part of six and a half years, he has given us some fantastic memories and a team to be constantly proud of.
“We all wish him well in his new role and thank Southampton for the way in which everything has been handled. They have acted in a most professional manner since first making their approach to us, as has Nathan.
"The events have panned out exactly as described over the last few days and we appreciate it's highly frustrating to watch, but we would rather it be transparent and, genuinely, the formalities only came to a conclusion in the early hours of this morning. Until then, there remained two possible outcomes.
“Nathan leaves behind a fantastic legacy, along with Alan and Chris, who have both also played a significant part in taking us on a journey from League Two, in Alan’s case, to establishing us in the higher reaches of the Championship. We thank them both too and wish them every success.
“The fact we are looking up towards the Premier League, rather than down towards League One as we were when we brought Nathan back to the club, makes the Luton Town job an attractive one.
“This gives a genuine opportunity to give our continued progress a refresh, and we are treating this process exactly the same as when recruiting players. A managerial recruitment group has been set up and has met every day since we were first contacted by Southampton as we conduct a thorough search for his successor, and we are well into that painstakingly detailed process.
“Once again we can rely on our very own Big Mick to carry the honour of leading our men out on Saturday, and we will take the time afforded us by the World Cup break to ensure we find the right person to continue taking our football club forward.”
