After a false start, they landed a couple of higher picks in next month's draft, a fourth- and a sixth-rounder from the New York Jets in exchange for Tebow and a 2012 seventh-rounder.
Eight hours after initially agreeing to a deal, the teams completed the trade that was hung up earlier Wednesday when the Jets apparently balked at repaying Denver more than $5 million for a salary advance due Tebow. ESPN reported that the two sides had agreed to split that cost.
"As a former player, I know the last two weeks were not easy for Tim," Broncos executive John Elway said in a statement. "He was put in a difficult situation, and I commend him for how he handled it with the same first-class manner he displayed throughout his career in Denver."
Bunkley's departure notwithstanding, the Broncos trust Manning's arrival will make Denver a more attractive destination for free agents.
"Obviously, the expectation level is going to go up but that is where we want it to be, too," Elway said Tuesday. "Like Peyton said, he has a lot of work to do and we have a lot of work to do as a football team. As a personnel department, we have a lot of work to do."
Even though Tebow led the Broncos to the playoffs last season, Elway believed Manning gave the team a better chance of winning a championship now. To do that, Manning will have to be the Manning of old after missing all of 2011 following a series of neck surgeries, and the Broncos will have to improve at many other positions.
Elway and Fox called Tebow on Monday night to tell him he was going on the trading block. Elway said he wanted to do right by the enormously popular Tebow, who took over a 1-4 team and led the Broncos to the AFC West title and a playoff win over Pittsburgh.
Although the unorthodox QB energized the Broncos with a series of fourth-quarter comebacks last season, Tebow's messy mechanics and flawed footwork resulted in a completion percentage of just 46.5 percent, 34th in the 32-team league. It was even worse - 40 percent - in the playoffs.
The Broncos changed their offense midseason to fit his unique skill set, dusting off the college-style option, and it revitalized them as they soared to the top of the NFL rushing charts. But their passing game regressed.
Fox said the Broncos will add another quarterback either in free agency or the draft, where they now have seven selections. Two veteran possibilities to back up Manning are former Colorado State and Chicago Bears QB Caleb Hanie and 13th-year pro Billy Volek, who has spent the last several seasons in San Diego.
With Manning, a four-time MVP and 50,000-yard passer signing a five-year, $96 million deal with Denver, General Manager Brian Xanders and Elway said they expected the Broncos' pool of potential free agent candidates to expand.
"When you have a guy on your team like Peyton Manning, you have a chance to win and players in the NFL know that. There are a lot of guys out there that are free (agents) that want to go somewhere where they can win championships," Elway said.
Some of Manning's former Colts teammates, such as Dallas Clark and Jeff Saturday, might want to rejoin him in the Rocky Mountains.
"It's important because our linebacking corps, we didn't want to have multiple holes there and we have a potential suspension of D.J. (Williams), so it was important to get Joe and Wes back," Xanders said.
Williams and defensive tackle Ryan McBean are suing the NFL to have their six-game drug suspensions overturned.
"We don't know how that legal process is going to go," Xanders said. "We know they're appealing through the court system, so we'll let the lawyers deal with that and hopefully it works out for the Broncos."
After giving Manning $18 million guaranteed next season, the Broncos still have about $20 million in cap space to add players around him.
"Obviously with where we are, we have some ability to try and do some things," Elway said. "I wouldn't necessarily say that we are going with a different mindset. ... The thing I want to do is give our guys and organization the best chance to be successful. If there are guys out there that we know can come in and help us, we want those guys on our football team."
"Coach Fox is flexible on the offensive side," Elway said. "When you think about it, one of the things that you get with Peyton Manning is not only great physical attributes but the mind that he can bring to the game is really what separates him from everybody. For us to not take advantage of what he has in his mind would be foolish for us."
Even though Manning won't have the comfy confines of a dome anymore, Fox said he can't wait to see him run the no-huddle offense at altitude, a double-whammy for opponents.
When the trade was finally finalized, Fox reflected on his outgoing QB.
"Tim Tebow brought an incredible spirit and spark to our team that helped us turn the season around. Along the way, he earned the trust of his teammates and coaches while inspiring our fans," Fox said in a statement. "His competitiveness, clutch performances and will to win played an instrumental role in our team earning a division title and advancing in the playoffs.
"A player and person like Tim don't come around very often. He is real and he walks the walk. I'm looking forward to watching him continue his career with the Jets, and I wish him the very best."
AP Sports Writer Pat Graham contributed.
Follow AP Pro Football Writer Arnie Stapleton on Twitter: http://twitter.com/arniestapleton