The club will welcome Hird back on August 25 but his role will be limited to preparation for the 2015 AFL season - meaning the Essendon legend will not be present in the coaches box or at training for the remainder of the season.
Bombers chairman Paul Little outlined the plans for Hird in a club statement.
"Before James' departure overseas it was agreed we would need to sit down and clarify his role for the remainder of the 2014 season when he returned," Little said.
"As a result, we have all agreed that when James is eligible to return to the club on August 25, James' focus will be entirely on the 2015 season - he will not be in the coaching box or have an active coaching role at training.
"In that time period between August 25 until our final game of the season, James will take the opportunity to begin planning the upcoming pre-season, list management, recruiting and preparation for 2015 away from the club."
While Hird was keen to get back involved in the current season, he understood Essendon's position.
"As much as I would dearly love to have jumped straight back into working with the team, I am determined that whatever role I play should in no way act as a distraction from the 2014 campaign," Hird said.
"I would like to congratulate the club on what has been achieved so far this year. In very tough circumstances, the Club has demonstrated great strength and resilience."
A finals campaign looms for the Bombers - with the club currently sitting 7th on the AFL ladder.