The Oakland Raiders will hire Broncos defensive coordinator Dennis Allen as head coach, according to league sources.
The two sides spent much of Tuesday night hammering out an agreement and the contract is agreed to in principle but has not been signed, sources said.
New general manager Reggie McKenzie decided on his new coach exactly two weeks after he was hired. He immediately fired Hue Jackson, who went 8-8 in his only season as coach, and began the search.
Allen, a relative unknown to fans, was a finalist for the Rams' coaching job, according to sources, and would have been under strong consideration had Jeff Fisher not opted for St. Louis.
Allen interviewed with the Raiders last week and then for a second time Tuesday. Oakland then began focusing its search and zeroing in on Allen in recent days, informing the other candidates they were no longer under consideration, according to sources.
Allen will be the first new Raiders coach to come from the defensive side of the ball since late owner Al Davis hired linebackers coach John Madden before the 1969 season. Madden won 103 games in 10 seasons and won Oakland's first Super Bowl following the 1976 season.
"He's a smart guy," said Raiders punter Shane Lechler, who played college ball with Allen at Texas A&M. "He knows defenses well. He schemes really good. It'll be interesting to see how he handles the head coaching role. This will be his first time. We'll see."
After Madden retired, Davis exclusively hired offensive coaches: Tom Flores, Mike Shanahan, Art Shell, Mike White, Joe Bugel, Jon Gruden, Bill Callahan, Norv Turner, Shell again, Lane Kiffin, Tom Cable and Jackson. Allen will be Oakland's seventh coach since the 2003 season in his first head coaching job at any level. The Raiders have not had a winning record or made the playoffs since Callahan took them to the Super Bowl following the 2002 season.
But there have been plenty of changes for the Raiders since Davis died Oct. 8. His son, Mark, took over the team and hired McKenzie as general manager after the season to take over many of the on-field and personnel decisions that Davis had made during his nearly half-century with the organization.
McKenzie immediately fired Jackson after signing his contract Jan. 10 and began a search for the new head coach. He interviewed Allen, Eagles offensive coordinator Marty Mornhinweg, former Miami interim coach Todd Bowles, Saints offensive coordinator Pete Carmichael Jr. and Green Bay assistants Winston Moss and Dom Capers.
With McKenzie having spent almost two decades with the Packers, his former colleagues in Green Bay were originally considered to be the favorites.
But instead, the Raiders hired Allen from division-rival Denver. The last time the Raiders hired a former Broncos assistant as head coach was Shanahan in 1988.
In his first season as coordinator in Denver, Allen helped the Broncos improve from allowing a league-worst 29.4 points and 390.8 yards per game to ranking 20th in yards (357.8) and 24th in points (24.4) this season on the way to an AFC West title.
The Broncos increased their sack total from 23 to 41 as the Broncos were tied for the sixth-most blitzes on pass plays in the league this season, according to STATS LLC.
"He was very successful with us and he'll be very successful with them," Broncos linebacker Von Miller said at the Pro Bowl.
Allen had served as New Orleans' secondary coach the previous five seasons and had also coached for Atlanta. He runs a 4-3 defense, which the Raiders have used the past seven seasons.
The Raiders, however, struggled mightily on defense this past season despite giving big contracts in the offseason to Richard Seymour, Kamerion Wimbley and Stanford Routt. Oakland had franchise worsts in touchdown passes allowed (31), yards per carry (5.1), yards passing (4,262) and total yards (6,201), while giving up the third-most points (433) in team history.
Oakland joined this year's Tampa Bay team as two of the four teams to allow at least 30 TD passes and 5.0 yards per carry in a season, a distinction achieved previously by only the 1950 Baltimore Colts and 1952 Dallas Texans. The Raiders also became the sixth team since the 1970 merger to allow at least 2,000 yards rushing and 4,000 yards passing in a season.
The Broncos will now be looking for their seventh defensive coordinator in the past seven seasons.
Adam Schefter is an NFL Insider for ESPN. Information from The Associated Press contributed to this report.