After retiring, Walter began his coaching career with Karlsruher SC in 2006, being an assistant of Markus Kauczinski in the under-19 team. He took over the under-15s in the following year, before moving to the under-17s in 2013, and to the under-19s in 2014.
On 7 July 2015, Bayern Munich paid Karlsruhe a € 200,000 fee to sign Walter, who was named manager of their under-17 team.[4] On 17 May 2017, he was appointed manager of Bayern's reserve team.[5]
Walter led Holstein Kiel to a 6th-place finish in the 2018–19 2. Bundesliga, eight points shy of a play-off qualification.
Stuttgart
In June 2019, Walter became the new head coach of VfB Stuttgart also in the second division.[7] He was sacked on 23 December, despite having his team on the third position.[8]
Hamburger SV
On 25 May 2021, after more than a year without a club, Walter was named the new head coach of fellow 2. Bundesliga side Hamburger SV.[9] He lost promotion in the play-offs in his first two seasons, and was sacked in February 2024.[10]
Hull City
On 31 May 2024, Walter was appointed head coach of EFL Championship side Hull City on a three-year deal.[11] He managed his first competitive game with the Tigers on 10 August 2024, the opening fixture of the 2024–25 season, a 1–1 home draw with Bristol City.[12] Having gone 1–0 down with six minutes to go, Óscar Estupiñán scored the club's first goal under Walter's stewardship, a well-converted penalty in added-time.[13]