Although a keen admirer of his talents Albion boss Tony Mowbray could not stand in Shakespeare's way as he plots his own way up the career managment ladder.
Pearson and Shakespeare previously worked together at The Hawthorns during Bryan Robson's spell in charge with the two now linking up after Leicester's relegation to League One last season.
A popular figure behind the scenes, 'Shakey' joined the Baggies back in 1999 initially as a Recruitment Officer after previously playing for the club in the early 1990s making 128 appearances. However the former midfielder made his way up through the ranks coaching the youth, reserves and finally the first-team under Tony Mowbray helping the Baggies secure their first title in 88 years.
"We're sorry to see Craig leave," Albion boss Tony Mowbray said.
"He contributed greatly to our success last season but we didn't want to stand in his way.
"I think he was genuinely torn over what to do because of the Premier League challenge we have here.
"He feels it is an opportunity to progress his career from being a coach to an assistant manager.
"I'm sure he and Nigel have got an ambition to get Leicester promoted and it's a good opportunity for him.
"While we're disappointed he's going, we understand the reasons and we wish him all the best in his new venture."