The memorandum of understanding was signed by both parties Sunday in Columbus, Ohio. Tennessee had planned to introduce Schiano at a news conference Sunday night.
But when news broke earlier Sunday that Tennessee was close to finalizing a deal with Schiano, there was public outcry among Tennessee fans, with people citing his connection to the Jerry Sandusky era at Penn State.
About 100 people gathered on Tennessee's campus to protest a potential Schiano hire, with many of them holding signs with various messages such as "Schia-NO.''
At a rock on campus where students often paint various messages, the words "Schiano covered up child rape at Penn State'' appeared Sunday.
Schiano, Urban Meyer's defensive coordinator at Ohio State for the past two seasons, and Tom Bradley, defensive coordinator under recently fired UCLA coach Jim Mora, were both Penn State assistants under Joe Paterno during Sandusky's tenure.
Both have denied allegations of their knowledge of child abuse by Sandusky from a 2015 deposition by ex-Penn State assistant Mike McQueary.
Court documents of the deposition released in July 2016 said McQueary indicated Bradley said Schiano went to him in the early 1990s "white as a ghost and said he just saw Jerry doing something to a boy in the shower.''
After the allegations became public, Meyer and Mora both defended their assistants' integrity.
Among those against Schiano's hiring were several Tennessee government officials.
"The head football coach at the University of Tennessee is the highest-paid state employee,'' Tennessee State Rep. Jeremy Faison said. "They're the face of our state. We don't need a man who has that type of potential reproach in their life as the highest-paid state employee. It's egregious to the people and it's wrong to the taxpayers.''
Faison was one of at least three state representatives who went on Twitter or issued statements to criticize the possibility of Tennessee hiring Schiano. Republican gubernatorial candidates Mae Beavers, Diane Black, Beth Harwell and Bill Lee also relayed their objections to a Schiano hire.
State Rep. Eddie Smith tweeted that "a Greg Schiano hire would be anathema to all that our University and our community stand for.''
Our Tennessee standards mean something, and a Greg Schiano hire would be anathema to all that our University and our community stand for. I sincerely hope that these rumors are not true, because even serious consideration would be unacceptable.— Eddie Smith (@RepEddieSmith) November 26, 2017
Schiano, 51, has spent the past two seasons as Meyer's assistant head coach and defensive coordinator. He now remains on the job at Ohio State preparing for Saturday night's Big Ten title game against Wisconsin.
He had been out of coaching since 2013, after he was fired by the NFL's Tampa Bay Buccaneers following an 11-21 tenure in two seasons.
Mark Dominik, who hired Schiano while he was Tampa's general manager from 2009 to '13, defended Schiano.
We spent hours & hours interviewing & background checks on Greg Schiano. Yes we didn't win. Fact-he's honest, awesome father/husband, & an excellent football coach. This shouldn't be whether YOU think you like him or not, you don't even know him. #Meyer #Belichick ask them.— Mark Dominik (@MarkdominikNFL) November 27, 2017
Schiano went 68-67 in 11 seasons as Rutgers' head coach from 2001-11, guiding the Scarlet Knights to six winning campaigns and six bowl games in his last seven seasons there.
The Volunteers fired Butch Jones on Nov. 12, the day after they lost 50-17 at Missouri to fall to 0-6 in SEC play. He had a 34-27 record in five seasons at Tennessee. The Volunteers lost to Vanderbilt 42-24 to finish 4-8, 0-8 in the SEC, their first eight-loss season in school history and their first winless campaign in the SEC.
Last year, Tennessee reached a $2.48 million settlement of a federal lawsuit brought by a group of women who sued the school for the way it handled their allegations of sexual assaults by student-athletes. The suit alleged that the school violated Title IX regulations and created a "hostile sexual environment" through a policy of indifference toward assaults by student-athletes.
ESPN's Mark Schlabach and Chris Low and The Associated Press contributed to this report.