The Bombers have been looking for a replacement for former football operations manager Danny Corcoran for nearly four months.
Corcoran was suspended for six months, with two suspended, when the AFL hit Essendon with a raft of penalties for its 2011-12 supplements program, but he advised the club last December he would not be returning when his ban ended in February.
Essendon announced on Tuesday that under its football department structure Corcoran's former responsibilities would be split between Kerr and Craig.
Kerr will oversee all services that support the Dons' football department, including operations, IT, welfare, list management and recruiting.
The Lions released a statement saying Kerr would finish with club on Tuesday.
Craig, who joined the Bombers as head of coaching development and strategy at the end of last season, will oversee all Essendon's team performance functions including coaching, development and high performance.
Essendon chief operating officer Xavier Campbell said the new structure would provide the governance and management framework required in modern football.
"It has been a long and extensive process, but importantly we believe this new structure will best position our club moving forward," Campbell said.
"The expectation of football managers is to have expert knowledge on an increasingly wide range of areas including high performance and medical, coaching, IT, operations, recruiting, compliance and finance.
"In order to effectively manage the demanding expectations, changing AFL landscape in relation to competitive balance and the wide-ranging requirements associated with the head football department role, it has become very clear that the skills set required to fulfill this important position should be split into two specific areas of operations and performance."
Kerr was an assistant coach at Essendon from 1998-99 before serving the AFL Players' Association as player development director and then CEO for five years. After returning to work in the corporate world, he has been the Lions' list manager for several years.
Craig was Adelaide coach from 2004-11 and Melbourne's sports performance director from 2012-13.
The Bombers also announced they had appointed an integrity officer, Michael Abrahams.
Abrahams joins the Bombers from the Australian Cricketers' Association where he was legal counsel and previously worked as a commercial solicitor with a major Australian law firm.
Twitter: @AFL_Nick
