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On 27 June 2017, Pandiani was named manager of Hospitalet's youth squad.

Pandiani announced his retirement on 16 June 2016 after a 23-year professional career, at the age of 40.

Pandiani returned to Masnou after retiring, now as a first-team manager. Sacked on 2 November 2016, he was appointed at the helm of Europa's Juvenil A squad on 13 December.

Pandiani returned to the Barcelona area where he spent the 2014–15 season coaching junior teams at Masnou, where two of his sons played. He said that although he had always wanted to coach, he still thought of himself as a player and was open to offers; in June 2015, he signed for Lausanne-Sport of the Swiss Challenge League, with the remit of supervising and teaching the tricks of the trade to the 15-year-old striker Andi Zeqiri, who had already made his first-team debut.

In late January 2013, Pandiani and Nico left Villarreal and joined Atlético Baleares of the Segunda División B. They both started in Nico's second senior match, and Pandiani scored in the 2–1 defeat away to Sant Andreu on 12 May.

In October 2013, the pair returned to Uruguay and signed for Primera División club Miramar Misiones. Pandiani scored three times in the six remaining matches of the 2013–14 Apertura, as his team finished next to bottom, and played regularly during the Clausura but scored only twice as they repeated their previous finish, which contributed to relegation.

In late August 2012, Pandiani signed a one-year contract with Segunda División club Villarreal, where his 18-year-old son Nico was a C-team player. On his debut, at home to Guadalajara on 2 September, he entered the game as a second-half substitute and scored the winning goal, and did the same the following week in another narrow win, at Ponferradina.

Osasuna's first goal of the 2010–11 season only came in the fourth matchday, and the 34-year-old Pandiani scored it through a header as the team came from behind to win it 3–1 against Real Sociedad, at home. On 30 January 2011, during half-time of a 1–0 home win against Real Madrid, he was involved in a "verbal spat" with Cristiano Ronaldo, suggesting afterwards that "As a footballer he is a phenomenon but to do the things he does, maybe he has a screw loose."

The 35-year-old Pandiani returned to Espanyol for 2011–12, signing a one-year contract and acting mainly as backup to youth graduate Álvaro Vázquez. On 22 September he came from the bench to score the game's only goal at home against Getafe, in stoppage time. On 27 October he repeated the feat, albeit not so late in the game, with a powerful header at home to Real Betis.

For 2007–08, Pandiani joined Osasuna. Scarcely used in his first year, he was instrumental for the Navarrese in the following campaign, especially after the arrival in mid-October of coach José Antonio Camacho, finishing as the club's top scorer.

Having failed to continue to display his previous form, Pandiani returned to Spain on 13 January 2006, after completing a move to Espanyol for £1 million.

In his first full season he scored only seven La Liga goals, including a first-half hat-trick against eventual champions Real Madrid in the Santiago Bernabéu Stadium, but was top scorer in the 2006–07 UEFA Cup with eleven as his club reached the final, which they lost on penalties to Sevilla.

Pandiani, who had a successful loan stint at Mallorca while still at Depor, moved to Birmingham City in the Premier League, also on loan, in January 2005, after a series of run-ins with coach Javier Irureta. He scored a goal on his debut against Southampton in a 2–1 home win, and went on to score three more in the season, prompting manager Steve Bruce to sign him on a permanent contract for a reported fee of £3 million.

Despite his relatively successful career in Spain, Pandiani only received four caps for Uruguay, the first coming on 28 March 2001 in a 1–0 home defeat against Paraguay in the 2002 World Cup qualifiers.

Pandiani made his debut for the Spaniards on 27 August 2000, coming from the bench for Diego Tristán in a 2–0 win over Espanyol at Estadio Riazor in the Supercopa de España return match. Despite never being an undisputed starter for the Galician team he was one of their most important attacking elements, often scoring as a substitute, netting 13 goals during the 2003–04 season.

Born in Montevideo, Pandiani started his career with hometown club Progreso, moving on to Basáñez and Peñarol, the latter also in the country's capital. In December 1999 he agreed terms to join Deportivo La Coruña as a replacement for his compatriot Sergio Martínez, and the move was officially completed the following January when he signed a five-and-a-half-year deal for an undisclosed fee, still remaining with Peñarol until the end of the season.

Walter Gerardo Pandiani Urquiza (born 27 April 1976) is a Uruguayan former professional footballer who played as a striker, and a manager.