New Portland general manager Neil Olshey will choose between Stotts and interim Blazers coach Kaleb Canales, The Oregonian first reported Wednesday. Canales took over on an interim basis after Nate McMillan was fired in March.
Stotts, 54, is 114-168 in four seasons as coach of the Atlanta Hawks and Milwaukee Bucks. He was named one of four finalists after an interview last week in Portland and interviewed for a third time on Monday, the source said.
Stotts served as Rick Carlisle's top assistant last season with the Mavericks after Dwane Casey left after the 2011 championship season to take over as head coach of the Toronto Raptors.
After Stotts' initial interview, Carlisle gave Stotts a ringing endorsement, telling The Oregonian, "Of all the coaches presently in play, Terry is by far the best available."
Canales, 34, started as a video intern with the Blazers in 2005. In 2009, he was promoted to assistant coach. He went 8-15 during his interim stint to finish last season and received high praise from Portland players.
Canales became the NBA's first head coach of Mexican-American descent. He is a native of Laredo, Texas, and a graduate of the University of Texas at Arlington.
Steve Clifford and Elston Turner were the other two finalists for the Portland job.