Mike Babcock has made his decision: He is headed to Toronto.
The Toronto Maple Leafs announced the hiring of Babcock on Wednesday afternoon, ending months of speculation as to where the veteran coach would land. Babcock will be introduced at a news conference scheduled for Thursday.
Babcock cashed in on his status as the most coveted hire in hockey. According to multiple reports, he received an eight-year deal that is worth a whopping $50 million. That contract would make Babcock the highest-paid coach in the NHL.
Though Babcock was under contract with Detroit through June 30, the Red Wings granted their coach permission to speak to other teams on May 8.
By hiring Babcock, the Leafs must send a third-round pick to Detroit as compensation.
In selecting Toronto, Babcock leaves a Red Wings franchise that had reached the playoffs for an NHL-leading 24 consecutive seasons to a team that has struggled competitively. Toronto missed the playoffs last season for the ninth time in 10 years.
The Maple Leafs have also not won a Stanley Cup since 1967, a season before the NHL expanded from its original six franchises. The Red Wings, by comparison, have won the championship four times since 1997.
The 52-year-old also coached Canada to Olympic gold medals in 2010 and '14.
He brings stability and a high-profile face to a franchise that is on its fourth full-time coach since Paul Maurice took over in 2006.
The Maple Leafs had a vacancy after Randy Carlyle was fired in January. He had been replaced on an interim basis by assistant Peter Horachek.
Babcock's decision comes as a slight surprise, given that he indicated last week that he hated losing and wanted to be part of a team that had an opportunity to win immediately.
The Maple Leafs have an overpriced and aging roster, as well as questions at goaltending. The team unraveled last season. After holding a 19-9-3 record in mid-December, Toronto closed the season going 11-35-8 to finish 15th in the 16-team Eastern Conference standings.
On the bright side, Babcock is reunited with Brendan Shanahan, who took over as the Maple Leafs president last year. Shanahan played for Babcock in Detroit.
Landing Babcock is a major coup for Shanahan, who in the past 13 months since taking over as president has fired general manager Dave Nonis, coach Carlyle, interim Horachek and several assistants and scouts.
"I'm proud of Shanny, I'm proud that he dreamt big," Maple Leaf Sports & Entertainment President and CEO Tim Leiweke said. "He got the big whale. ...
"It should give everyone great hope about the future of this organization. Mike Babcock is a phenomenal coach, and I think we're really lucky to get him."
Before deciding on the Leafs, Babcock had been in discussions with several other teams, including the San Jose Sharks and Buffalo Sabres. The Sharks were informed Tuesday night that they were out of the running, while the Sabres received word Wednesday morning, club sources told ESPN.com's Pierre LeBrun.
Though Babcock had discussions with Red Wings general manager Ken Holland about signing a contract extension in Detroit, he ultimately chose to leave the organization with which he had spent the past 10 seasons. Detroit's final offer was believed to be around $4 million per year, a source told LeBrun.
Holland told reporters that Babcock called at 11:15 a.m. ET on Wednesday to inform Holland of his decision. Holland added he harbored no ill feelings toward Babcock and thanked him for 10 great years.
"My offers last June were a four-year term. Again in January, it was a four-year term," Holland said. "As we sat yesterday morning, I said, 'Mike, the best I can do is five years.' When you've been in the same city as long as I have, and as long as Mike has, you don't get much longer term than four and five years. So I think that certainly part of the decision-making process probably for Mike was the amount of term that he could get in Toronto."
With Babcock leaving Detroit, Holland said that Jeff Blashill, the team's AHL coach in Grand Rapids, is a leading candidate to succeed Babcock behind the bench. Holland added that his short list of candidates included two or three names. Blashill has led the Grand Rapids Griffins to the Western Conference finals of the Calder Cup playoffs for the second time in three years.
The Red Wings have been protective in regard to keeping Blashill. In allowing Babcock to test the market, Holland prevented Blashill from interviewing with other teams.
Babcock began his NHL head-coaching career with a flourish in 2002-03, when he took Anaheim to within one win of a Stanley Cup title. He began coaching the Red Wings after the lockout that wiped out the 2004-05 season.
Babcock was the first coach to win at least 50 games in each of his first four seasons with an NHL team -- a deceiving stat in the shootout era but an impressive one nonetheless -- when he did it with the Red Wings. With 458 wins for Detroit, he ranks No. 1 on the franchise's career list, ahead of luminaries like Scott Bowman and Jack Adams.
Information from The Associated Press contributed to this report.