Thompson, who turns 52 on Monday and was Seattle's vice president of football operations under Mike Holmgren from 2000-2004, has full authority over all aspects of the Packers' football operations. Sherman's new title is executive vice president and head coach, Harlan said.
Thompson was given a five-year contract, Harlan said. He did not divulge the financial specifics.
Harlan said repeatedly that Sherman's losing of the GM tag had nothing to do with this season's disappointing finish, punctuated by a playoff loss to Minnesota last week.
"This move is not meant in any way to criticize any element of Mike," Harlan said. "I told him basically the same things I told you. We are doing this for the future of the franchise and it's going to let him spend more time coaching. And it gives him that one more accountable person there to help him make the football decisions."
Harlan was never a proponent of Sherman being both coach and general manager, but went along with Wolf's suggestion for fear a new general manager would not work well with Sherman, who made a favorable impression by winning his final four games during his first year as head coach to finish with a 9-7 record.
Thus, after completing his first season as head coach in 2000, Sherman took over for Wolf as general manager in 2001.
"I was reluctant to bring in someone over Mike who he might not get along with, someone who would probably change the scouting department who I felt was very efficient," Harlan said. "And even though I'm not fond of the one-man system, I thought at that particular time it was the best."
Harlan early this season, however, became convinced a change needed to be made. Harlan recalled meeting a NFL general manager, who said, "'I don't care where I went scouting this off-season, no matter how remote the place was, your head coach was there.' I thought maybe some of that time would be better spent with the coaching staff."
Harlan met with Sherman on the Saturday morning before the Oct. 3 game against the Giants. Sherman, Harlan said, was preoccupied with Mike McKenzie and the bogged-down trade talks with the New Orleans Saints.
"I thought, with a big game coming up tomorrow, we need to be focused on that. Someone else can do those things (work on trades)," Harlan said.
Harlan addressed the team's Executive Committee at its mid-October meeting and told them that he was strongly considering splitting the coach and general manager duties. Harlan began compiling a list of six candidates. At the top of that list was Thompson. Harlan then sought input from Wolf, and Thompson was Wolf's suggestion, as well.
"It helped me a great deal when I called Ron and he said: ‘Absolutely. Ted Thompson,'" Harlan recalled.
Once the Seahawks' season ended, Harlan was able to get busy. After attending NFL meetings on Monday and Tuesday, Harlan contacted the Seahawks on Wednesday to get permission to talk to Thompson. Permission was granted. Harlan made his pitch to Thompson that day, and contract talks started and finished on Thursday.
On Friday morning, Thompson accepted the job.
"He topped my list from Day One and I was going to make every attempt to do what it took to get him to Green Bay," said Harlan, who never seriously considered any of his other candidates.
Harlan and Sherman met three times in recent days, including Wednesday just after asking the Seahawks for permission to talk to Thompson. Harlan divulged little of their conversations, saying only that Sherman told him, "I like Ted very much. I can work with him."
Harlan took that to mean Sherman would return as head coach if given the opportunity. That, however, will be up to Thompson. Thompson has the authority to fire Sherman or extend his contract. Sherman's contact expires after next season, and his agent, Bob LaMonte, has talked to Harlan about a contract extension.
Harlan said he did not talk to Thompson about Sherman, but Harlan said: "It's all speculation, but I would say, yes, Mike will definitely be the coach here next year. He loves coaching in Green Bay. He loves the tradition."
Thompson was due in Green Bay on Friday night, and Harlan said talks about Sherman would be broached at that time.
Thompson, meanwhile, will meet with reporters at 11 a.m. Saturday. Sherman's Friday end-of-season session with reporters will be held Monday.
The Packers have won three division titles, made the playoffs in four consecutive years and have gone 2-4 in the postseason under Sherman as head coach and general manager. Sherman took on the general manager duties in 2001 when Ron Wolf retired.
"We feel this restructuring helps the Packers in two ways," Harlan said. "First, we are able to add to our staff a respected, 13-year National Football League veteran who is a proven talent evaluator and an efficient administrator. And, second, it will reduce Mike's workload and enable him to devote more time to coaching."
Green Bay and Philadelphia are the only clubs to reach the postseason each of the last four years. And, since 2000 only the Eagles have more regular-season wins. Now, moving forward, the Packers are making an attempt to improve on that track record.
"In today's salary cap world of professional football," Harlan added, "where rosters are overhauled every offseason, both the job of a general manager and the job of a head coach are extremely demanding and require an inordinate amount of time and effort.
"I am quite pleased to know the Packers will be moving into the future with these two highly regarded men at the top of our football operation."