Sources told ESPN that Gottlieb agreed to a six-year deal.
"It is an honor and a thrill to become the women's basketball coach at USC," Gottlieb said in a statement released by the school. "I am inspired by the incredible history of this program and excited about the opportunity to do special things with the young women I will have the privilege to coach."
Gottlieb leaves the NBA after an aggressive USC pursuit to bring her back to the Pac-12 Conference, including a massive upgrade in program salary and resources with hopes of restoring USC to the elite of women's college basketball, sources said.
Gottlieb earned praise inside the Cleveland organization and locker room for her work with the Cavaliers, becoming a front bench assistant under head coach J.B. Bickerstaff.
Gottlieb played a role in everything on Bickerstaff's coaching staff, including game preparation and player development with the Cavs' strong young core of Jarrett Allen, Collin Sexton, Darius Garland and Isaac Okoro.
"I went to the NBA to challenge myself at the highest levels of the game of basketball and was fully invested in that journey," Gottlieb said. "However, the commitment of President Carol Folt and athletic director Mike Bohn to women's basketball at USC, and to my vision of success, made it clear that NOW is the right time to come here and use all my coaching experience to partner with the young women in the program, the administration and our future student-athletes to make USC women's basketball the most dynamic program in the country."
Gottlieb will remain with the Cavaliers for the final four games of the regular season before leaving for USC, sources said. Her agent, Bret Just of WME Sports, finalized details of the deal with Bohn on Monday morning, sources said.
"We are thrilled to name Lindsay Gottlieb our new women's basketball head coach," Bohn said in a statement. "A trailblazer who smashed through the glass ceiling of men's professional sports, I cannot think of a better coach, leader, and role model for our young women. Lindsay has a proven record of success in the country's premier women's basketball conference, and her commitment to student-athletes aligns perfectly with our vision and values.
"After an incredible experience in the NBA, Lindsay is taking leadership of our program at a time when she has become her very best as a coach and teacher, and we have the utmost confidence in her ability to lead the Women of Troy back to national prominence."
Gottlieb, 43, built a perennial NCAA tournament team in her eight seasons at Cal, including a trip to the Final Four in 2013. She advanced to the NCAA tournament seven times in those eight seasons, winning tournament games in six of those seven years.
Gottlieb led UCSB to the NCAA and WNIT tournaments in three seasons before Cal hired her away in 2011. She coached several of her stars, including New York's Layshia Clarendon and Los Angeles' Kristine Anigwe, to the WNBA.