ENGLEWOOD, Colo. -- The Denver Broncos formally announced Sean Payton as the team's newest head coach Friday.

Payton signed what sources told ESPN was a five-year contract, but he's essentially been on the job since Wednesday, including interviewing prospective assistant coaches for his staff.

In a statement Friday afternoon, Broncos owner/CEO Greg Penner called Payton "an outstanding leader and Super Bowl champion with a brilliant offensive mind'' and added "he shares our commitment to winning championships for Broncos Country and we're excited to welcome him as our new head coach.''

Penner also added "it is rare in any sport to hire a head coach with Sean's credentials and we appreciate the first-class manner in which the Saints approached this process. We also appreciated the opportunity to meet and learn from the other highly qualified, outstanding coaches we interviewed. Our goal was to identify a strong leader for the Denver Broncos who is focused on winning, and we found him in Coach Payton.''

Payton, who spent 15 seasons as New Orleans Saints head coach and was the NFL Coach of the Year in 2006, will be formally introduced at a news conference Monday morning.

"I'm looking forward to the challenge," Payton said in an interview published on the team's official Twitter feed. "The tradition here is amazing. It's going to take a lot of hard work, but our plan is to win. And that's really begun today."

Payton replaces Nathaniel Hackett, who was fired Dec. 26, just 15 games into his first year with the team. Hackett had been hired in January 2021, eight months before the Walton-Penner group's purchase of the Broncos was formally approved by the NFL.

Penner had said in the days that followed Hackett's dismissal that he wanted the Broncos' next coach to be "a strong leader for this organization that's focused on winning. That starts with culture. It's instilling a sense of accountability and discipline.''

Those were all attributes Penner said Payton had.

"The tradition here is amazing. It's going to take a lot of hard work, but our plan is to win."

1-on-1 with Head Coach : pic.twitter.com/LZ4qEh1OCT

— Denver Broncos () February 4, 2023

Payton was 152-89 with the Saints, including a win in Super Bowl XLIV over the Indianapolis Colts and then-quarterback Peyton Manning. Payton did not coach in the 2022 season when he worked as an analyst at Fox and was suspended by the NFL for the 2012 season in wake of an investigation of a bounty program the NFL said the Saints had in place for tackles on opposing players.

Because he had signed an extension with the Saints in 2019 that was set to run through the 2024 season, the Saints and the Broncos had to negotiate compensation for Denver to sign Payton as their head coach. The Broncos traded this year's first-round pick -- 29th overall -- and the Broncos' second-round pick in 2024 to the Saints to hire Payton. The Broncos will receive the Saints' third-round pick in 2024 as well.

Payton will be tasked with repairing the league's lowest scoring offense in 2022 as quarterback Russell Wilson finished with a career-low 16 touchdown passes and was sacked a career-most 55 times. The Broncos have missed the playoffs seven consecutive seasons and have fired three head coaches -- Vance Joseph, Vic Fangio and Hackett -- since January 2019. Kicker Brandon McManus is the only player on the current roster who was in uniform for the Broncos' last playoff game -- their Super Bowl 50 win to close out the 2015 season.

Under Payton's direction, the Saints won at least 10 games nine times and led the league in passing five times as quarterback Drew Brees topped 5,000 yards passing five times.

Payton initially interviewed with Broncos officials Jan. 17 and was the fifth of eight candidates initially interviewed in the first wave.