Walden had been serving as interim head coach at Southern Miss since Jay Hopson resigned following an opening loss to South Alabama. The 30-year-old Walden, who entered the season as co-offensive coordinator and wide receivers coach, last week tested positive for COVID-19 and didn't attend Southern Miss' loss Saturday at Liberty.
Walden, who informed Southern Miss' staff of his departure Tuesday morning, is scheduled to travel to Austin Peay on Friday and be introduced Nov. 2.
Walden and Austin Peay athletic director Gerald Harrison are both self-quarantining after meeting shortly before Walden's COVID-19 diagnosis.
Southern Miss assistant head coach Tim Billings, who coaches the team's nickelbacks, handled Walden's responsibilities during his absence and is expected to continue as interim head coach, sources said. Southern Miss is scheduled to host Rice on Saturday.
Austin Peay had a coaching vacancy after Mark Hudspeth resigned in July after leading the Governors to an 11-win season in 2019. Hudspeth had been suspended for "unacceptable conduct" before his resignation.
Austin Peay played a limited fall schedule and went 0-3. The team is set to begin a seven-game spring schedule in late February.
Walden became the youngest head coach in all of college football when he took the top job at East Texas Baptist at age 26. He spent the 2016 season at the Division III school, going 7-3, before joining Hopson's staff at Southern Miss.