TORONTO –– Red Sox general manager Theo Epstein made it official Friday afternoon that the club has designated shortstop Julio Lugo for assignment.

Epstein said the motivation behind the move was putting the best team on the field. The Red Sox’ general manager admitted he made a mistake with the four-year, $36-million free-agent signing of Lugo prior to the 2007 season.

The Red Sox have seven days to work out a trade, and they will be “more than accommodating” to take on the financial burden of Lugo’s contract. If a deal is not done, Lugo will officially be released and become a free agent.

With Jed Lowrie ready to be activated on Saturday and since Nick Green has played so well this season, the Red Sox thought the Lowrie-Green combination at shortstop would be better for the club.

“Ownership has been consistent that we’ll do what we need to do to keep the best possible team on the field,” said Epstein. “It’s a sunk cost. I’m sorry it didn’t work out better for Julio, but keeping him on the team wasn’t going to change that.”

Lugo did not participate Thursday in a mandatory workout at Rogers Centre due to a “mix-up,” but he arrived in Toronto late Thursday night and spoke briefly with Epstein and manager Terry Francona. They talked again Friday morning and Lugo was told of his status.

Epstein said Lugo understood the situation and was professional about it. The general manager also said there’s been a lot of communication with Lugo this season and that he was told he would either be traded or released once Lowrie was able to return.

Lugo on Friday told The Boston Herald that he hoped to continue his career with another team.

“When you see a good-looking girl, you get married and sometimes things don’t work out,” Lugo said, according to the Herald story. “I gave it my best and unfortunately things didn’t work out. This is the best for both parties. I wanted it to work out but it didn’t.”

“Sometimes the best organizations make mistakes,” said Epstein. “It was a free-agent signing that didn’t work out. We ended up paying for past performance, not current performance. It was a mistake, and as the decision maker, that’s on me. We’ll move on. We’re a better organization having gone through it and we’ll make better decisions going forward.”

The winter before Lugo arrived at his first spring training for the Sox, in 2007, he lost 15 to 20 pounds due to a stomach issue, according to Epstein. Because of that, Lugo lost strength and quickness.

“We got him off on the wrong foot and he was never the player with us that he was in Tampa,” said Epstein. “We tried a lot of things to get the best out of him. We did win a World Series with him as our everyday shortstop. He made a lot of contributions to that world championship and that’s not lost in the mix. But it didn’t work out the way we envisioned it. He never got on track, locked in and comfortable. He never played even close to the way we expected.”

Epstein’s goal is to build the organization from within so it doesn’t have to rely on the free-agent market.

“This was lesson learned –– for sure,” he said.

jmcdonal@projo.com