Updated

Ann Arbor, MI (SportsNetwork.com) - Jim Harbaugh was introduced Tuesday as the new football coach at the University of Michigan.

Interim athletic director Jim Hackett made it official at a press conference, two days after Harbaugh departed as the head coach of the NFL's San Francisco 49ers.

Hackett said it was a seven-year contract and various reports indicate it to be worth about $5 million per season plus incentives.

"We are excited to have Jim come home and lead our football program into the future," said Hackett on Tuesday. "Since retiring from playing in the NFL, Jim has worked hard to become one of the elite coaches in the profession. He has been successful at every coaching stop and has done an exceptional job of molding and developing young men as football players, students and citizens. We believe that Jim is the perfect individual to balance the academic and athletic expectations that come with representing this football program and university."

Harbaugh called his return to Michigan "a third Homecoming."

His father was an assistant coach at Michigan under Bo Schembechler from 1973-79, and Harbaugh was a quarterback for the legendary coach from 1983-86.

"Throughout my life I have dreamed of coaching at the University of Michigan," said Harbaugh on Tuesday. "Now it's time to live that."

Harbaugh played 14 seasons in the NFL before embarking on a coaching career that also included collegiate stops at San Diego and Stanford before his highly successful four-year run with the 49ers.

After a 29-6 record in three years at San Diego, he turned the Stanford program into a Pac-12 powerhouse. The Cardinal went 29-21 in his four years, including a 12-1 mark with an Orange Bowl victory in 2010.

The 49ers didn't have a losing season under Harbaugh, reaching the NFC title game in each of his first three seasons with a Super Bowl appearance after the 2012 campaign. San Francisco lost that Super Bowl to Baltimore, coached by his brother John.

This year's 49ers team went just 8-8 amid swirling rumors all season over his job security.

Harbaugh will become the 20th head coach in Michigan history and will replace Brady Hoke, who was fired in early December after a 5-7 season. Hoke was 31-20 during his Michigan tenure, losing more games each year following an 11-2 debut in 2011.

"I'm honored and humbled," said Harbaugh, who will be the sixth former Michigan player to lead college football's winningest program.

Harbaugh was one of the most efficient passers in NCAA history during his time at Michigan, leading the nation in passing efficiency in 1985. He led the Wolverines to a 21-3-1 record as a full-time starter during his final two seasons, including a pair of victories against rivals Michigan State and Ohio State.

Michigan's last two coaches, Hoke and Rich Rodriguez, were a combined 2-12 against the Wolverines' biggest rivals over the past seven years.