Olabe retired in June 1999, at not yet 32. He was immediately appointed coach of Real Sociedad's youths.
Late into the 2001–02 season, Olabe replaced the fired John Toshack at the helm of the first team,[3] going on to avoid team relegation after collecting five wins and two draws from nine matches. On 2 July 2002, he and assistant manager Jesús María Zamora were handed a four-month ban as the former did not possess a coaching licence.[4]
After acting as the club's director of football, Olabe was appointed SD Eibar coach on 27 December 2005.[5] He was dismissed less than three months later,[6] as the second-tier campaign eventually ended in relegation.
In 2010–11, Olabe was one of three managers in charge of UD Almería – where he had already worked in directorial capacities[7]– who returned to the second division after a four-year stay. In the ensuing summer, he signed with Real Unión in the same capacity.[8]
Olabe became Real Sociedad's director of football in March 2018, replacing Loren in the role.[9]
^Del Castillo, Alfredo (28 June 2016). "Ya no salen porteros" [No more goalkeepers coming through]. El Diario Vasco (in Spanish). Retrieved 1 January 2017.