LaFontaine, a commentator on New York Rangers broadcasts with Madison Square Network since 2010, was named the Sabres’ president of hockey operations.
Nolan, who was named the NHL's coach of the year in 1997 following his only season guiding the Sabres, is back on an interim basis. He went on to coach the New York Islanders and reportedly has been the bench boss of the Latvian national team since 2011.
LaFontaine played six of his 15 NHL seasons with Buffalo, scoring 158 goals and 385 points in 268 regular-season games while adding 27 points in 19 playoff contests.
"I'll be actively searching for the next general manager," he said at Wednesday morning's news conference.
"My goal is to get the best men out there to help build a championship calibre team."
A series of concussions forced the centre to retire on Aug. 11, 1998 as a member of the Rangers and in 2003 LaFontaine was inducted into the Hockey Hall of Fame.
LaFontaine’s 468 goals rank second all-time among American-born skaters, trailing only Joe Mullen (502).
The Sabres retired LaFontaine’s No. 16 on March 3, 2006, one of six numbers retired by the club.
Considered one of the game's best playmakers and fastest skaters, he broke into the NHL with the New York Islanders in 1983.
LaFontaine set Sabres records for points with 148 and assists with 95 in a career season in 1992-93.
In 1995, he was named the recipient of the Bill Masterton Trophy for perseverance and dedication to hockey.
Nolan, meanwhile, spent eight years running his own business in Canada and the United States after Buffalo fired him. An Ojibwa from the Garden River First Nation Reserve in northern Ontario, he has said in the past that he believes racism played a role in his long hiatus from an NHL bench.
Nolan guided the Islanders to the Stanley Cup playoffs in 2007 and posted a 74-68-21 mark with the team in his two seasons.
In 2011, he joined a Latvian outfit that saw its world ranking fall to 12th after a 13th-place showing at the world hockey championship that May.
"You've just got to have faith and belief that things will work out," Nolan told The Canadian Press in August 2011. "My perseverance and my patience have been really, really tested.
"I sent out resumes to teams [in North America] to see if there's any coaching vacancies within their organization and received no replies. … It's kind of tough to go through, but maybe I just didn't fit in [in the NHL]."