Dominic Kinnear has resigned as coach of the Houston Dynamo to take over the Quakes at the end of the season.
Current assistant coach Ian Russell will serve as interim San Jose coach for the final two games of the season.
It's a homecoming for Kinnear. The Scottish native began his coaching career as an assistant with the Earthquakes in 2001 and helped the club to MLS Cups in 2001 and 2003.
He was named the club's sixth head coach in 2004 and was won coach of the year honours in 2005. Kinnear remained with the team after its relocation to Houston, winning MLS Cups in 2006 and 2007.
"It's sad and difficult to see Dominic departing ... we've had a great run together, and he's played a vital role in who we are as a club," said Dynamo president Chris Canetti.
Both teams will miss the playoffs this year. Houston has a record of 11-15-6 while San Jose is 6-15-11.
Watson, like Dasovic a former longtime Canadian international, spent five years with the Earthquakes beginning as an assistant coach in 2010. He was named the club's interim head coach in June 2013 and was named head coach on Oct. 30, 2013.
Dasovic also briefly served as Toronto FC manager.
With files from The Associated press.