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Colchester chairman Robbie Cowling said: "Promoting an assistant manager to the lead role is often seen as a cheap or safe option, but I can assure all Colchester fans that I have selected John because I truly believe he is the best candidate for the job.
"I have been impressed with John's hunger to manage again. I have always sought ambitious managers and there is little doubt that he is as enthusiastic and ambitious as ever."
Ward was assistant to Adrian Heath at Burnley, joining the club on the opening day of pre-season training in 1996. He left with eight games to go that season to manage Bristol City, leaving the season to collapse when promotion was very much on.
Prior to joining Burnley he'd managed York and Bristol Rovers. Alongside other coaching roles, since his time at Bristol City, he's also managed Wolves (temporarily), Cheltenham and most recently Carlisle who he left in November 2008.