Craig, who is in the last year of a three-year contract, will shift away from a traditional contract to become a Crows staff member in a deal that is not time specific.
The deal gives the club and Craig unprecedented flexibility and both parties can end the arrangement at any time.
In a statement released on Monday, the club said it expected Craig to remain as coach beyond this season and that it was confident he could take Adelaide to its next premiership.
The club is yet to define what Craig's role will be when his coaching tenure expires, but it's likely to be in the area of 'high performance'.
Craig, who has already stated he'll step down from the top job at Adelaide when he no longer feels he's the right person and that he'll never coach another club, said he was happy with the arrangement.
"I'm happy to go down this path. In fact, I'd have been happy to operate on a handshake. It doesn't matter to me," Craig said.
"What's vitally important though is that management and the board are happy and supportive of the job we're doing and the direction we're taking together.
"The minute they're not, I'll be moving onto something else. And it won't be a painful experience for either of us.
"Importantly, I'm still enjoying the role. In fact, I've never enjoyed it more and I'm very enthusiastic and confident about where we're going with his playing group."
Craig has coached the club in 150 games since taking over from predecessor Gary Ayres midway through the 2004 season.
He took the Crows to finals in each of his first five full seasons as coach, before missing the top eight for the first time last year.
The deal has been likened to the one in place between Collingwood and outgoing coach Mick Malthouse, except there is no final date on Craig's coaching career and no talk of a succession plan.
