If I recall correctly he retired from the Jets, then not only had to retire but also had to get the Jets to release him so he could sign with Minnesota. Someone correct me if I'm wrong, but the Jets couldn't trade him and were therefore forced into cutting him per the trade agreement they had with Green Bay; that is, if the Jets had traded him then they got less in return or had to give the Packers a draft pick back. However, by cutting him rather than trading him they owed nothing.
That led to speculation that this was Favre's plan all along; play one year with the Jets, force them into letting him go, and walk away as a free agent so he could sign with Minnesota - which is where he wanted to be in the first place, so he'd have a chance to play against and stick it to his former team.