Yzerman spent his entire Hall of Fame playing career as a center with the Red Wings and was captain when they won the Stanley Cup in 1997, 1998 and 2002. He was hired as an adviser to general manager Ken Holland after retiring as a player in 2006, then became general manager of the Tampa Bay Lightning on May 25, 2010.
Yzerman stepped down as Lightning GM and into an advisory role under GM Julien BriseBois on Sept. 11, 2018, saying he wanted to be able to spend more time with his family.
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Yzerman said he hopes to keep the Red Wings on a path to future success built around their young core and promising prospects, and drafting wisely.
"This takes time, and this organization has been through it before," Yzerman said. "I can't give you a specific timeline, but we are going to this in the way that I believe will get us to where we need to be.
"I think there's a good foundation in place in players like [center] Dylan Larkin, [forward] Anthony Mantha, [center] Andreas Athanasiou, [forward] Tyler Bertuzzi and [defenseman] Filip Hronek. You need players like that to build the core you need to reach the higher levels. Kenny has also accumulated a lot of draft picks, and it will be imperative that we draft well, but we already have some promising prospects in players like [forward Filip] Zadina, [center Michael] Rasmussen, [defenseman Jared] McIsaac and [center Joseph] Veleno. We also have an excellent young coach in Jeff Blashill."
Holland, who completed his 22nd season as the Red Wings general manager, was promoted to senior vice president and will serve as a senior adviser to hockey operations.
"It's a real exciting day for me to see Steve Yzerman come back where he belongs," Holland said.
Video: Yzerman named Red Wings Executive VP and GM
The Red Wings were 32-40-10, 14th in the Eastern Conference and 24 points behind the Columbus Blue Jackets for the second wild card into the Stanley Cup Playoffs. Detroit has missed the playoffs in each of the past three seasons after qualifying for the playoffs 25 consecutive times.
"We are thrilled to welcome Steve Yzerman back to Hockeytown," Red Wings governor, president and CEO Christopher Ilitch said. "Steve has produced tremendous results as a general manager in the National Hockey League, as well as an executive in international competition.
"He is a smart, driven, competitive and determined executive with outstanding leadership skills, as demonstrated both over his playing and management careers. Steve and Ken have proven to be two of the most successful general managers of their era, and to have Steve leading our hockey operations and Ken providing valued support is a tremendous advantage for our organization. I believe we took a strong management team and made it even stronger today."
During Yzerman's eight seasons as GM, the Lightning made the Eastern Conference Final four times and advanced to the Stanley Cup Final in 2015, when they lost to the Chicago Blackhawks in six games. The Lightning tied the NHL single-season record with 62 wins this season, matching the 1995-96 Red Wings and winning the Presidents' Trophy as the top regular-season team in the NHL, but were swept by Columbus in the Eastern Conference First Round.
"Steve literally transformed the organization's hockey operations, from our professional and amateur scouting departments to the front office to our coaching and locker room staffs, to our major and minor league rosters," Lightning chairman Jeff Vinik said. "He built one of the finest organizations in the NHL and led us to the playoffs in six of the nine years he was with us, including three conference finals and one Stanley Cup Final. While we are disappointed to see Steve leave for our rival Detroit Red Wings, he leaves our franchise in good shape under the extremely capable leadership of Julien BriseBois, as we continue to pursue that elusive Stanley Cup."
Among the moves made by Tampa Bay under Yzerman was the signing of center Steven Stamkos to an eight-year contract on June 29, 2016, two days before he would have become an unrestricted free agent. Yzerman also hired coach Jon Cooper on March 25, 2013.
"When I left for Tampa, I didn't know what was going to happen five or 10 years down the road," said Yzerman, who turns 54 on May 9. "My goal was to win a Stanley Cup. I wasn't thinking beyond that. I loved working there, and I thought Kenny would be the general manager forever ... and I'd be 100 before I got a chance in Detroit. I feel 100 some days, but I'm glad my chance came earlier than that.
"I had one year left on my contract in Tampa, but my family was here, so it was kind of a commute. After seven or eight years, I had a decision to make. I loved the job and the organization, but it was getting harder to do the job the way it should be done and still spend time with [wife] Lisa and the girls. I agreed to stay with the organization, but as the year went on, I realized how much I loved being a manager and being in charge. At that point, once they showed interest, coming back to the Detroit Red Wings was not a tough decision."
Yzerman played for the Red Wings from 1983 through 2006. He is a member of the Hockey Hall of Fame and was named one of the 100 Greatest NHL Players presented by Molson Canadian in 2017. He had 1,755 points (692 goals, 1,063 assists) in 1,514 games through 22 NHL seasons.
He is the second-leading scorer in Detroit history behind Gordie Howe (1,809 points) and is the Red Wings assists leader.
Yzerman won the Conn Smythe Trophy as MVP of the Stanley Cup Playoffs in 1998 and was executive director for Canada when it won the gold medal at the 2014 Sochi Olympics.
NHL.com correspondent Dave Hogg contributed to this report