McLeod said yesterday he wanted to be a coach out on the paddock.
''These opportunities do not come along too often. You can't say no to it,'' he said.
Every coach wanted to be involved with the national team, he said.
He was in line to take over the top job at the Highlanders but has instead gone in a different direction.
''I want to continue to coach and coach defence. Being a head coach you actually coach a little bit less. You have to do other stuff, stuff to manage, player contracts, work with sponsors and everything like that. It is a big job ... I just want to get out on the ground and coach.''
He is signed with the national union until early 2020, aligned with the other national coaches.
But it was hard to leave the Highlanders.
''Just from what we have built over the last few years, the success we have had, the people who we have enjoyed it with.
''That is the level you want to get to and enjoy the people you are working with. To say no and to turn away from that is not easy.''
He had discussions with his family and friends for a few days before making a decision.
He was interviewed by a five-man panel, including All Black coach Steve Hansen, for a job which will have him away from home for about 200 days a year.
A decision on whether he will move from Dunedin for the new job was yet to be made. He is married with four children, aged 13 to 7.
McLeod made his provincial playing debut in 1995 for Waikato and went on to play 17 matches for the All Blacks, including 10 tests.
He played 45 games for the Chiefs before heading for Japan in 2001.
He returned to New Zealand and was Waikato's assistant coach in 2008 and also worked with the Chiefs.
He first worked with the Highlanders in 2013, a disappointing year for the franchise.
McLeod said yesterday the support he received in that difficult first year had helped him as a coach.
''When you have something like that, to know you have the support of so many people no matter what. That was really encouraging ... and you listen and learn from it.''