Walter Smith has been appointed manager of Rangers for a second time.
He has quit his post as Scotland head coach to return to the job he gave up in 1998 and has signed a three-year contract.
The Scottish Football Association have confirmed their intention to take legal action against Smith 'for breach of contract' and against Rangers 'for inducement to breach the contract'.
David Taylor, SFA chief executive said: 'Walter's departure is a serious blow to the Scottish FA.
'He has done an excellent job for us and the Scottish national team. We are very disappointed that he has chosen to leave us at this critical time in our Euro 2008 qualification campaign.'