Three other club chief executives - Sydney's Tom Harley, Simon Garlick from Fremantle and the Western Bulldogs' Ameet Bains - have been reported as the favourites for the new role of chief operating officer (COO).
The league announced the creation of the COO role early last month.
Swann has accepted an offer to leave the reigning premiers and fill one of the most challenging administration roles as the AFL's executive general manager - football performance.
It comes after AFL chief executive Andrew Dillon announced a widespread shake-up of his executive team last Friday.
One of the key moves was splitting the head of football operations, currently held by Laura Kane, into two roles.
The AFL announced Kane would head football operations, demoting her, and now Swann is confirmed to run football performance.
Swann, who has been involved in club administration for more than 25 years, will oversee hot issues including the match review system, umpiring and laws of the game.
"I'm leaving to go the AFL to head up footy, I suppose, in the simplest terms," Swann said when he confirmed his appointment to Lions colleagues.
AFL commentator Nick Riewoldt seized on that comment.
"He's not going there to split a role with Laura Kane, is he ... he's coming in to sit across all of it and the clubs are rejoicing," Riewoldt said on the Seven Network.
Lions coach Chris Fagan said Swann would be a major boost for the AFL.
"I'm really pleased for Swanny, it will be great for the game," he said.
"He's one of those composed, calm and experienced people. We're obviously sad to lose him ... but things don't last forever.
"ln this instance, it will be a great win for the AFL.Â
"He'll help bring another angle to decision making that perhaps hasn't been there in recent times."
Swann will leave Brisbane and start at the AFL on July 21.
After his lengthy stints at three clubs, Swann added he was heading "to the mothership".
Kane will now be responsible for football operations for the AFL, AFLW, VFL and VFLW, among other duties.
Swann has held chief executive roles at Collingwood (from 2000), Carlton (from 2007) and the Lions since 2014.
"Greg, across his 26 years leading clubs, has earned a reputation as one of the most passionate and accomplished football CEOs in AFL, steering the on and off field turnaround of three of the competition's proudest clubs," Dillon said in a statement on Monday.
"Greg has a deep love and understanding of the game, he respects its heritage and has a great instinct on the future direction of footy.
"He understands how much it means for so many people."As I said last week, the game is the reason we exist; it is as big and as good as it has ever been, and the AFL football department must continue to evolve."
Also on Monday, it was confirmed Brisbane COO Sam Graham would replace Swann as club CEO.
"Sam has his feet well under the table. It will be a seamless transition," Fagan said.
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