From Packers.com:

The Green Bay Packers have signed DE Michael Montgomery and placed LB Nick Barnett on injured reserve. The transactions were announced Friday by Executive Vice President, General Manager and Director of Football Operations Ted Thompson.

This hasn't been in any doubt for the past week. Barnett has needed surgery on his wrist since the Lions game, he had the surgery this week, and the recovery time is long enough that it effectively wiped out the rest of the season. The only hope had been that he could somehow play through it and then have surgery in the spring. It's a tough deal for Barnett, who's now missed significant time in two of the past three seasons.

To replace Barnett, they re-signed Montgomery. They loved his effort last season, but it was clear he didn't fit as a 3-4 DE. They don't really need another LB to replace Barnett because they've just promoted LB Robert Francois and just promoted LB Maurice Simpkins from the practice squad. But since DE Ryan Pickett is out with an ankle injury, they could use another player for the defensive line, and Montgomery is familiar with the system.