Mike Nolan's stay on the NFL job market was brief.
Nolan replaces Paul Pasqualoni, who was fired after Miami's defense backslid in his second season as coordinator. The Dolphins also announced the hiring of former New York Giants defensive coordinator Bill Sheridan as inside linebackers coach.
Nolan spent four seasons as head coach of the San Francisco 49ers, but he went 18-37 before being fired midway through the 2008 season. He has made five stops as an NFL defensive coordinator, with the Broncos, Baltimore Ravens (2002-04), New York Jets (2000), Washington Redskins (1997-99) and New York Giants (1993-96).
Nolan became available after the Dolphins' courtships of Al Groh and Keith Butler failed to produce an agreement. Groh became defensive coordinator at Georgia Tech, and Butler decided to remain with the Pittsburgh Steelers as linebackers coach.
Dolphins' coach Tony Sparano favors a 3-4 defense, and Nolan converted the Broncos to that scheme last year. Denver improved to seventh in the NFL in defense from 29th in 2008, but the team faded badly and missed the playoffs for a fourth consecutive year.
In their final four games, the Broncos gave up 122 points. Still, Nolan's departure was a surprise.
NFL.com's Steve Wyche reported Monday that the Dolphins asked the Broncos for permission to speak to Nolan. The coach told The Denver Post only that he and the Broncos had "mutually agreed to part ways," and a team-issued statement echoed that sentiment.
A source with knowledge of the situation in Denver also told NFL Network's Jason La Canfora that several teams had contacted the Broncos seeking permission to speak to Nolan. The Chicago Bears and New England Patriots are looking for defensive coordinators, too.
The Dolphins allowed a franchise-record 140 points in the fourth quarter, most in the NFL. They fell behind 24-6, 27-0 and 27-10, respectively, in their final three games.
Now that the Dolphins have a new defensive coordinator, they can intensify their shopping for linebackers and a free safety. Linebackers Jason Taylor and Joey Porter and nose tackle Jason Ferguson, all in their 30s, are among those players who might not be back in 2010.
The Associated Press contributed to this report.