The shake-up came four days after the Chargers finished 8-8 and out of the playoffs for the second straight year, and two days after coach Norv Turner and general manager A.J. Smith were notified by team president Dean Spanos that they will return next season.
Pagano is the brother of Chuck Pagano, defensive coordinator of the Baltimore Ravens.
Pagano said the moves were shocking because he considered Manusky as close as a brother.
"It's a bittersweet day," Pagano said." I'm excited about the opportunity, don't get me wrong, but I love him very dearly."
Turner defended Manusky at his final news conference of the season on Monday, saying he didn't consider the hiring of Manusky a mistake, as some in the organization reportedly felt.
"Under the circumstances, he and his staff have done a good job," Turner said, suggesting that the Chargers lack impact players.
The Chargers' defense wasn't as aggressive as promised by Manusky, a former NFL linebacker who coached Chargers linebackers before serving as San Francisco's defensive coordinator from 2007-10. The Chargers did lack impact players on defense, in part because of injuries but also because top draft picks over the years haven't panned out.
San Diego routed the Ravens at home on Dec. 18 to keep its playoff hopes alive, then was eliminated from postseason contention in a sound defeat at Detroit on Christmas Eve.
After that game, Turner said: "The biggest question is how can you play so well against Baltimore, then not play well against Detroit? A lot of it is matchups; a lot of it is the style of offense. We have not played well against a wide-open spread offense, whether it be Green Bay or the way Chicago played us and threw the ball. Defensively we've struggled against teams that spread us out and used three or four wide receivers."
Turner denied that Manusky was a scapegoat.
"Obviously, when you make a change, that's a natural thing that people assume," Turner said Thursday. "I think we looked hard at what we need to do to move forward. We made a decision about what was the direction I wanted to go, we wanted to go. John was a part this defense for a long time, and I think he'll do a good job at it."
Pagano interviewed for the job last year before the Chargers gave Manusky a two-year contract to replace Ron Rivera, who left to become head coach of the Carolina Panthers.
"I don't know if our philosophies are that much different. We both kind of learned under Wade Phillips," Pagano said, mentioning the former Chargers' defensive coordinator. "This was a dream of mine to become the defensive coordinator here. I've worked many years here and it's something I've always looked forward to. ... We've just got to play better and play smarter. See the ball and go tackle the guy with the ball and good things will happen."
Pagano won't label his style.
"There's no signature. I don't have that attacking style or this or that. We're going to put pressure on the quarterback. We've got to create turnovers and we've got to play hard."
Turner said Pagano will bring a mix of what he learned under Phillips, Rivera and Manusky.
"We do know we need to get better on third down," Turner said. "We fell off a great deal there. That will be a big part of our emphasis."
Pagano spent the last 10 seasons on San Diego's staff and has coached linebackers since 2005.