The coach, who last season led the Lady Longhorns to a 23-5 record and the East region championship, has stepped down.
Grant Coley submitted his resignation to school officials Jan. 17, saying he could not continue due to health reasons.
"I have been sick since before Christmas and I recently hurt my back," he said. "I couldn't do that to the kids."
In his resignation, Coley also cited personal reasons for stepping aside.
At the time of his resignation, the Lady Horns were 15-5 and ranked fifth in the state.
Payson High School athletic director Jason Lobik lauded the former coach saying, "We need to appreciate all the hard work and dedication he put into the girls' program."
Immediately after Coley's resignation, school officials huddled to discuss his replacement.
They ultimately decided on physical education teacher Stacy Anderson, who was not in the basketball program this year, but was an assistant last year under Coley.
Anderson, the wife of Payson High School football coach Josh Anderson, praised Coley as a "man who put his heart and soul into coaching."
Anderson also said she hoped Coley remains close to the program, so "I can pick his brain for his wisdom."
The former coach responded by saying he would be available to help Anderson at her beck and call.
Anderson coached her first game Jan. 18 in a 57-53 loss at Snowflake.
Before Coley took over the Lady Horn program in June of 2006, he coached the Rim Country Middle School boys to the White Mountain League title. He also served stints at various levels in girls programs at Sunnyslope, Dysart, Apollo and Arcadia high schools.
Coley moved to Payson several years ago after a long career as a Farmers Insurance agent.