Prevalence of Agile methods in software companies is increasing dramatically. Software companies need to employ these methods to overcome the inherent challenges of traditional methods. However, transitioning to Agile approach is a topic of debate and there is no unique and well-defined transition model or framework yet. Although some research studies have addressed barriers and strengths behind the successful Agile deployment, it seems that this process still needs to be studied more in depth. The rationale behind this is the socio-technical nature of Agile transition and adoption. Particularly, the challenges and problems that software companies are facing during Agile transition, show that this process in more difficult than expected. Conducting a large-scale research study revealed that Agile transition and adoption process needs to be supported by several critical prerequisites. This study adopted a Ground Theory with the participation of 49 Agile experts from 13 different countries and empirically identified seven transition prerequisites. These prerequisites focus on the different aspects of the transition. The main aim of this paper is proposing these prerequisites and theoretical and practical implication of these prerequisites. Providing these prerequisites before moving to Agile increases chance of success in Agile transition and adoption and leads to fewer challenges during the change process.