 He began his managerial career in Cyprus, first at APE Pitsilia in the 2006–07 Cypriot Second Division and then moving to Olympiakos Nicosia, who had recently been relegated to the Second Division after many decades in the top flight.Papavasiliou led the "Green−Blacks" throughout their 2007–08 campaign, but missed out on promotion in the final match of the competition, in which his side was defeated 2−1 by fellow promotion contenders Nea Salamis, who thus finished in the promotion zone and left Olympiakos in fourth place.In the summer of 2009, Papavasiliou returned to Greece and the team where he made his name as a player, OFI, where he was paired up with former OFI teammate Myron Sifakis to lead the club during its 2009–10 Beta Ethniki campaign.