A deal, sources said, could be announced as early as Wednesday.
Williams, who had a 173-221 record in five seasons, was ousted as Pelicans coach on May 12 despite leading the New Orleans upstart to the final playoff berth in the Western Conference ahead of injury-hit Oklahoma City. Williams had a 2-8 record in two playoff appearances with New Orleans.
The Thunder have been chasing Williams as an assistant since his dismissal from the Pelicans. But Oklahoma City had an edge given that Williams and Donovan are both top coaches with USA Basketball, giving them some common ground as the former Florida coach assembles his first NBA staff.
"Monty Williams has been a big influence as well," Durant said in an October interview with USA Today. "Just coming from the same area I come from, knowing his background and knowing his story ... to know him from afar, just knowing that he put in so much work to become a head coach, just being around him for a week with USA basketball and knowing how great he is with the guys. He is a phenomenal leader, so he inspires me a lot because he's from the area I grew up in and the route he took to making it in the NBA and being a coach and being just a great leader."
The Thunder are expected to retain Mark Bryant, Darko Rajakovic and Adam Harrington off former coach Scott Brooks' staff. ESPN Insider Jeff Goodman has reported that Anthony Grant will follow Donovan from Florida to be an assistant with the Thunder.
ESPN.com's Royce Young contributed to this report.