Borrego met with Charlotte owner Michael Jordan over the weekend, after advancing to the final group of interviews along with Boston Celtics assistant Jay Larranaga.
Borrego is one of the most well-regarded assistants in the league; his coaching career has included two tours on Gregg Popovich's staff. Borrego turned down the University of New Mexico in his home state last year, choosing to continue pursuit of an NBA head-coaching job.
He will replace Steve Clifford, who was dismissed after consecutive 36-46 seasons with the Hornets.
Borrego made a strong impression in his interview with Mitch Kupchak, the Hornets' new president of basketball operations and general manager. Kupchak became more intrigued once he started to canvass NBA executives, coaches and players who have worked with Borrego, sources told ESPN.
Borrego interviewed for openings with the New York Knicks and Phoenix Suns this spring, and he was set to interview with the Milwaukee Bucks until Charlotte's offer, league sources said. He interviewed for the Houston Rockets and Memphis Grizzlies jobs in 2016, becoming a finalist for both positions.
The Hornets also met with new Knicks coach David Fizdale, San Antonio assistants Ettore Messina and Ime Udoka, and Portland assistant David Vanterpool.