Craig, a former coach at Adelaide, was appointed to the Demons in 2012 on a three-year contract as director of sports performance.
He took over as caretaker coach of the club in round 13 after Mark Neeld was sacked and coached the club to one win in 11 games.
The club will need to pay Craig out for the final year of his contract.
Craig discussed the coaching position with the Demons' coaching selection panel but did not make a formal presentation.
Roos told Fox Footy's On the Couch he had been told that the club and Craig had agreed that if the former Crows coach did not get the senior job, he would happily move on.
The new Demons coach began on Monday and met the club about recruiting and list management.
His appointment was announced last Friday after he agreed to a two-year contract with an option for a third.
The club will employ a senior assistant coach who will be groomed to take over from Roos when his tenure ends.
Candidates include Hawthorn assistant coach Adam Simpson and his West Coast counterpart Scott Burns. Former Swans defender Tadhg Kennelly is also in the mix, along with Swans assistant coach Leigh Tudor.
Tudor, however, is also considered a chance to join North Melbourne as an assistant.
Roos said he understood the club had spoken to Simpson and Burns and he would give them a call as soon as was possible, with consideration given for their current roles at their respective clubs.
Melbourne CEO Peter Jackson and Roos are expected to select the senior assistant and make a recommendation to the board.
He is very confident that a succession plan was right for Melbourne as it rebuilds respect within the competition.
"I have lived it and breathed it. I know it works ... it's not like it's something new in football," Roos said of the process that has been employed by the Swans, Collingwood and Greater Western Sydney.
Roos said he had knocked back previous coaching offers for the same renumeration and he was genuinely excited at the Melbourne job.
He said being told he would have to take a 55 per cent pay cut to keep his job with the Swans' academy was an indication that it was time to leave the club he had called home since 1995.
Roos said keeping Jack Watts and Colin Sylvia remained high on the list of priorities.
He said the decision on the senior assistant role was likely to be made before Watts had to make a call on whether he was staying at Melbourne.
