On Friday night, the school said Porter will be introduced as the team's coach at a campus event Tuesday. He will replace Eric Reveno, who was dismissed last month after 10 years with the Pilots.
Porter said in a news release he was honored for "this great opportunity."
"I'm excited about working tirelessly to continue to build this program up and establish a great tradition of Portland basketball," Porter said in the statement released by the Pilots. "I have been blessed to coach at the highest level in the NBA, but college has always intrigued me because of the impact that my college coach, Dick Bennett, has had on my life.
"To now have the opportunity, in my hometown of Portland, to impact other young men's lives is phenomenal and to be able to do so at a prestigious academic institution means a lot."
The Pilots finished eighth in the 10-team West Coast Conference this season, at 12-20 overall and 6-12 in conference play.
Porter was a two-time All-Star for the Portland Trail Blazers after being chosen in the first round of the 1985 draft out of Wisconsin-Stevens Point. The Blazers retired his jersey in 2009.
He averaged 12.2 points, 5.6 assists and 1.2 steals a game. His 7,160 assists ranked 14th on the NBA's all-time list.
Porter coached the Bucks from 2003 to '05 and the Suns for 51 games in the 2008-09 season. He has also served as an assistant coach for the Sacramento Kings, Detroit Pistons and Minnesota Timberwolves.
"This is a very exciting day for the University of Portland and Pilot basketball," Portland athletic director Scott Leykam said in the news release. "Terry brings a phenomenal basketball pedigree to campus, having coached and competed at the highest levels. He also will be a perfect fit for our campus and its mission of teaching and learning, faith and formation, and service and leadership.
"Terry has proven that he is a man of high character and integrity with a competitive drive that will translate well to this new opportunity. We want the city of Portland to embrace us and get on board with an exciting new chapter of Pilot basketball."
Information from The Associated Press was used in this report.