The Blue Jays agreed to a deal with Boston on Sunday that released Farrell from his contract with Toronto, allowing him to join the Red Sox.
"This was a dream job for him and an opportunity he really wanted to pursue," Blue Jays general manager Alex Anthopolous said on a conference call. "If it was a deal that made sense for our club as well we were going to go ahead and try to complete that."
The Blue Jays have a policy that employees cannot make lateral moves to other organizations without compensation. As part of the transaction with Boston to acquire Farrell's services, the Red Sox dealt infielder Mike Aviles to Toronto for right-handed pitcher David Carpenter.
"Once John indicated this was something he wanted to pursue ... it didn't make a whole lot of sense not to see if something could be worked out," Anthopolous said.
Farrell, who was named the 12th manager in Blue Jays history in October 2010, guided the team to a 73-89 record this season, good for a fourth-place finish in the American League East division standings. It was a step back from the team's performance in 2011, when Toronto finished 81-81 in Farrell's first season as manager.
Farrell was hired by the Blue Jays after four seasons as a pitching coach with Boston.
Anthopolous says Farrell indicated to him after the season that if the Red Sox showed interest, he wanted to pursue the opportunity.
Boston approached Blue Jays' management a few days and negotiations went from there.
"My responsibility is to the ballclub," Anthopolous said. "But I also understand the connection, I understand the ties. John had been there a long time, has a lot of strong relationships there.
"That's how he expressed it to me. This is the one job, there's no other city that was more of a perfect fit or a perfect opportunity."
Farrell received a three-year deal in Boston, which also interviewed San Diego Padres special assistant Brad Ausmus, New York Yankees bench coach Tony Pena, Los Angeles Dodgers third base coach Tim Wallach and Baltimore Orioles third base coach DeMarlo Hale.
"We met some outstanding managerial candidates in this process," Red Sox president Larry Lucchino said in the statement. "John Farrell brings a unique blend of managerial experience, leadership and presence, pitching expertise, front office experience, and an established track record with many members of our uniformed staff and members of our front office. He will hit the ground running."
The Red Sox fired manager Bobby Valentine after a disastrous 2012 season that saw the club finish last in the AL East with a record of 69-93.
"I'm extremely excited to be returning to the Red Sox and to Boston," Farrell said in a statement. "I love this organization. It's a great franchise in a special city and region, with great fans, and we want nothing more than to reward their faith in us."
In Toronto, Farrell helped instill a more aggressive approach on the basepaths, but inconsistent pitching was a constant issue. Major injuries to several starters wore down the staff in 2012 and ace Ricky Romero had an off-year.
Now the Blue Jays will have to fill the void left by Farrell's departure. Anthopolous says he will begin the process of hiring a new manager in the coming days.
"There are zero front runners," he said. "I've started to think about it a little bit but it will be a much small group (of candidates) than last time."
Aviles, 31, appeared in 136 games for the Red Sox last season, batting .250 with 13 home runs and 60 RBIs.
Carpenter, 27, was acquired by the Blue Jays from the Houston Astros in July and appeared in three games out of the bullpen. He posted 0-2 record with an 8.07 earned-run average in 33 games with Houston and Toronto in 2012.
When Boston fired Valentine a day after the regular season ended, reports quickly surfaced that the Red Sox were interested in seeking permission from the Blue Jays to speak to Farrell about the vacancy.
Farrell, who was set to enter the final year of a three-year deal with Toronto, has a 154-170 career record (.475 winning percentage) as manager.
The native of Monmouth Beach, N.J., has a pitching background. He broke in with the Indians in 1987 and made 109 starts over eight seasons with Cleveland, California and Detroit.
He moved into the coaching ranks in 1997 with Oklahoma State University as an assistant coach and pitching/recruiting co-ordinator. He joined the Indians as director of player development in 2001.
Farrell spent five years with Cleveland before joining the Red Sox as pitching coach in November 2006. Boston won a World Series the next year.
With files from the Associated Press.