Squid in transperent Mode with Cisco Router

Best way to do it - run WCCP redirect on your Cisco router. You minimum router configuration should be something like this:

ip wccp version 1

ip wccp web-cache redirect

int

ip wccp web-cache redirect out

In the latest IOS images Cisco has introduced some more extensions for WCCP protocols -for example, you may specify by access-list, who should be redirected, and who does not.

On your Squid box should be also configured for WCCP protocol. Old versions of SQUID and Linux required to add WCCP module to the Kernel - not sure if it's the case now.

As an alternative, some people run IP ROUTE-MAP on the Cisco router to forward Web traffic to the web-cache server, but it's more complicated solution.

Good luck,

Mike