Masters, who served his apprenticeship at Dean Court under Harry Redknapp in the late 1980s, has already held talks with Howe regarding the possibility of lending his support to the backroom staff.
Nicknamed Rhino due to his powerful shooting ability, Masters now lives in Norway where he played and coached after leaving England in 2001.
A cultured left-back, the Northern Ireland youth international made 51 appearances for Cherries and looked destined for a bright future after earning a big-money move to Wolves in December 1993.
But a succession of serious injuries restricted him to just 12 games in almost four years at Molineux before Masters tried to relaunch his career in Norway following a spell with Gillingham.
He played briefly for Moss FK and was then handed his first coaching post by Norwegian fourth division outfit Rygge FK after hanging up his boots.
Masters, now 41, was initially sounded out by his former Cherries team-mate Steve Fletcher, who has been promoted by Howe to the position of head of UK recruitment.
Howe told the Daily Echo: “Neil is a close friend of Steve Fletcher and they spoke about a couple of things. He is living in Norway and has a really good knowledge of the Scandinavian market so it made sense to invite him over to have a chat to see how we could progress things.
“There is a desire for us to seek value for money and to have a look at the foreign market. I wouldn’t say we are going to flood the squad with foreign players but we will definitely look at it and see what we can do.
“The really good thing about Neil is that he is a Bournemouth man and speaks really highly of time here. From the times I used to watch him play, I was very impressed with him and have also been very impressed with him on a personal level since meeting him so hopefully it can work out well for the club.”
Fletcher’s promotion comes just months after he accepted an invitation to join Howe’s backroom team, combining his scouting role with some ambassadorial duties for the club. His elevation has seen David Webb become head of European recruitment.
Howe added: “We have tweaked our scouting structure and Fletch is going to oversee the UK recruitment. He has done very well in his role and we have been very impressed with his work ethic and how detailed he is. He deserves this and it is just a slight reshuffle with Dave Webb now overseeing the overseas market.”