Campese has spent the past two seasons playing for Hull KR in the English Super League and will return to his junior club to fill the void left by Newcastle-bound Simon Woolford.

Woolford has linked with the Knights to coach the club's New South Wales Cup team having spent the past four seasons coaching the Blues for two premierships.

Campese's return to the Blues' halves continues the Queanbeyan outfit's NRL production line with Marc Herbert, Luke Branighan, and Woolford gracing Seiffert Oval in recent seasons.

The Blues were in talks with another coaching candidate before a phone call on Saturday morning alerted club officials ex-Australian five-eighth Campese was coming home.

Already keen on rekindling some sort of relationship, it wasn't long before Campese had agreed to take up the captain-coach role.

Campese is expected to return home towards the end of the year with his children still in school and Italian honours on the horizon.

The 32-year-old will lead The Azzuri in its upcoming Rugby League World Cup qualifiers against Serbia and Wales having missed rugby league's international showpiece event in 2013.

Blues officials say the nephew of Wallabies great David Campese "ticks all the boxes" with his status as a club junior meaning he will come free under the Canberra Raiders Cup's points system.

It means the Blues could have two club juniors with plenty of NRL experience on their books should Trevor Thurling choose to run around for another year.

Meanwhile, Woolford's move to Newcastle will see him work alongside his former Dragons mentor and current Knights coach Nathan Brown for the next two seasons.

Brown said with the restructure taking place in Newcastle a number of positions have become available in recent months, and a chance meeting with Woolford "five or six weeks ago" laid the foundations for the deal.

"I just got caught talking to him and what he'd been up to and where he'd been," Brown said.

"I knew he'd been working with Ricky because I obviously keep in close contact with Ricky and I just quizzed him a little bit and thought he might be somebody that would be a decent option.

"We just had a few conversations and things worked out well."

Woolford will work with Newcastle's top squad whilst coaching the NSW Cup team, and Brown expects the former Raiders captain to have a big influence on the club's hookers and middle forwards.

Newcastle's rebuild continues when the club resumes training on November 1 in a bid to better last-placed finishes in both the NRL and NSW Cup in 2016.

"He's been working in an environment that's been through what we're going through in Canberra," Brown said. 

"He's been working part-time with Ricky in Canberra in an environment that had to rebuild from the bottom up."