Burley moved briefly to Falkirk in 1993 as a player before returning to Motherwell as player-coach. Colchester United In June 1994 Burley returned to East Anglia as player-manager of Colchester United. He played seven first team games and managed the club for 20 matches, 8 of which they won, before returning to Ipswich Town in December. Ipswich Town Burley was appointed manager at his former club, with Dale Roberts as his assistant, having had talks with Town without Colchester knowing and so compensation was duly paid. He made his playing return for Ipswich, ten years after his last game for the club in a match against Motherwell in 1995 although didn't feature again as a player. During an eight-year reign he took Ipswich to three play-offs semi finals before finally winning promotion to the Premier League on the fourth attempt via the play-offs at Wembley beating Barnsley 4–2. The following season, he guided the club to fifth place and qualification for the UEFA Cup. This earned him the 2000–01 Premier League Manager of the Season award. Relegation the following season saw Burley's side struggling at the foot of Football League First Division and his contract was terminated by mutual agreement in 2002. Burley again applied for the job in 2012, losing out to Mick McCarthy. He was later critical of how the club was being run, in 2017, following the club's lowest finishing in nearly 60 years, stating that:The tradition of this club, with what Alf Ramsey, Bobby Robson and even myself achieved shouldn't be forgotten. Right now, Ipswich should be contesting for the top six in the Championship every year at the very least – that's where I think they should be. I was at the club for 21 years as a player and manager and the standard never dropped below that. That's the level Ipswich Town should be endeavouring to be at again. That's where they should expect to be. It's that type of club.When I took over in 1994 the first thing I said was I wanted to take the club back into Europe and we did that. Burley again showed interest in the Ipswich job following Mick McCarthy's exit in 2018, but he again lost out in favour of Paul Hurst. In November 2002, Burley was on the verge of taking over as Stoke City manager, but he had a late change of heart and declined