Kelly began his career at Leicester City, making his debut as a 19-year-old in a home game against Sunderland at the end of the 1983/84 season. He also had a brief loan spell at Tranmere Rovers. After making 18 starts for the Foxes and scoring one goal, he joined Wolverhampton Wanderers in 1986. Before joining Burton Albion.
International career
As a youngster, he also received a call up to represent the Ireland at youth level.
Coaching career
In 1989, Kelly was forced to retire aged just 24 after sustaining a back injury, and initially took the job of youth team coach at Wolverhampton Wanderers. He then trained as a journalist at the Wolverhampton Express & Star, before returning to football again, first back in the Wolverhampton Wanderers coaching set-up. Then moving to Watford as youth team coach, Blackburn Rovers as Academy Director, and then Leicester City.
Leicester City Manager
After the sacking of Leicester manager Craig Levein, following 18 months in charge, Kelly stepped up from his assistant manager role to take control on a caretaker basis. In his first ten games in charge his team took 21 points from a possible 30, steering the side up the Championship table and away from the threat of relegation to League One. He was awarded the Championship Manager of the Month award for March 2006. This followed wins over relegation rivals Hull City and Millwall, as well as victory against Luton Town and a creditable draw against Premiership-bound Reading. In recognition of his achievements, on 14 April 2006 he signed a one-year rolling contract, confirming his status as manager. On 11 April 2007 Kelly was sacked due to a poor run of results, his final game being a 3–0 defeat away to Plymouth Argyle. He was replaced by Nigel Worthington until the end of the season.
In May 2007 he joined Preston North End as part of the club's coaching staff. After the sacking of manager Paul Simpson. The club appointed Alan Irvine as the Club's new manager on 20 November 2007, with Kelly his assistant. In the season 2008/2009, Preston with Irvine and Kelly reached the Championship Play-Off's. Narrowly missing out on a place in the final, losing 2-1 on aggregate to Sheffield United. Kelly acted as caretaker manager following the departure of Alan Irvine in December 2009, a 7–0 FA Cup win over Colchester being his only game in charge. He left the club following the appointment of Darren Ferguson as manager.
Sheffield Wednesday
Kelly re-united with Alan Irvine at Sheffield Wednesday, once more as assistant manager. After Irvine left the Owls in February 2011, Kelly also departed after Gary Megson was appointed as manager and made changes to the coaching staff.
Nottingham Forest
Kelly joined Nottingham Forest as assistant manager to Steve McClaren's backroom team in the summer of 2011, with Jimmy Floyd Hasselbaink the club's First Team Coach. When McClaren resigned on 2 October after a dispute with the club's board Steve Cotterill was appointed the club's new manager on 14 October, with Kelly remaining as Forest's assistant manager. He was again placed 'temporarily in charge of first team affairs' during the pre season of the 2012/13 campaign after the sacking of Steve Cotterill by the club's new owners. Following the subsequent appointment of Sean O'Driscoll, Kelly again reverted to the role of assistant manager. He remained assistant manager when O'Driscoll was in turn sacked in December 2012 and replaced by Alex McLeish, only to find himself as caretaker manager yet again just six weeks later when McLeish resigned. Billy Davies was announced as the club's new manager on 7 February, though it was also announced that Kelly would remain in his role at the club.
During the summer of 2014, Alan Irvine was appointed the manager of West Brom, again hiring Kelly as his assistant manager. On 29 December 2014, Kelly took over the team alongside coaches Keith Downing and Dean Kiely after Irvine's dismissal. on 1 January 2015, they drew 1–1 away at West Ham United. and then recorded a 7–0 victory against Gateshead FC in the FA Cup on 3 January 2015, following the appointment of Tony Pulis as Head Coach On 5 January, Kelly, Dean Kiely and Keith Downing all departed the club, with Pulis wanting to reshape his own backroom team.
In December 2015, Kelly agreed to become first team coach and link up again with Alan Irvine alongside Paul Lambert at Blackburn Rovers. After they successfully guided the club to Championship safety, all three coaches left Rovers in the summer of 2016 before the start of the following season.
Fleetwood Town
Kelly once again joined up with Uwe Rösler at Fleetwood Town. Kelly was appointed a mere 3 days before the start of the 2016/17 League 1 season. In their inaugural season at Fleetwood, the team under Rösler and Kelly achieved their highest points tally and final league position in the clubs history. Finishing 4th in League 1 with 82 points, and reaching the League 1 Play-Off's where they were narrowly defeated by Bradford City. During the 2016/17 league season, Fleetwood with the youngest average aged squad in the division, went a club record 18 games unbeaten, including a memorable 2–0 away win at eventual league winners Sheffield United. Kelly left the club in the summer of 2018.
Kelly was appointed assistant manager to Ryan Lowe at Football League Two side Bury on 10 July 2018, as the club targeted an immediate return to League One. Despite well documented off the field issues, the team performed well and when Kelly left to join Swedish side Malmö FF, Bury were in an automatic promotion position which it maintained until the end of the season, winning promotion back to League One at the first attempt.
Malmö FF
On 1 January 2019 Kelly was announced as assistant coach to Uwe Rösler at Swedish giants Malmö FF. Before the start of the domestic league season, Malmö were beaten over two legs in the last 32 knockout round by eventual Europa League winners Chelsea FC. In Kelly's first full season in Allsvenskan, Malmö finished 2nd behind Djurgården by 1 point. Malmö continued to be successful in Europe, again winning through an 8-game qualifying route to the group stages of the 2019/20 Europa League. Despite being drawn in a tough group alongside: Dynamo Kiev, FC Copenhagen and FC Lugano, the Swedish side only lost one game and won the group after defeating Kiev 4–3 at Swedbank Stadion and Copenhagen 1–0 away in Denmark. By qualifying for the last 32 knockout stages of the Europa League in consecutive years, the club made history as the only Swedish side to achieve this feat in the modern era.
Fortuna Düsseldorf
On 7 February 2020 he followed Uwe Rösler and joined Fortuna Düsseldorf as assistant manager.
