The former defender signed a 15-month contract when he took over from Laurent Fournier on March 23, but he was unable to prevent the club sliding to the second division, although they fared slightly better by picking up 10 points in their last 10 matches.
Despite fan protests at the club’s continued poor form – protests that spilled over during the last match of the season on Sunday, which Montpellier won to seal the league title – the board have opted to retain the 44-year-old, who will continue to combine his duties with managing the Congo national team.
Prior to joining Auxerre, Wallemme was full-time coach of Congo, having managed Lens for three years previously.
He has also managed several lower-league clubs in France.
Otherwise there has been a staff reshuffle in the wake of the drop.
Kamel Djabour has been named assistant manager, with Alain Fiard expected to be named as head scout.
Former Lens keeper Guillaume Warmuz will be the new goalkeeping coach, replacing de Xavier Poitrinal, who will take up a role at the club’s famed youth academy.