Two people with knowledge of the agreement say Wade Phillips is returning to Denver as Gary Kubiak's defensive coordinator.
The two spoke to The Associated Press on condition of anonymity because the team didn't immediately announce the hiring, which was first reported by KDCO-AM and FM Mile High Sports Radio in Denver.
Phillips, 67, interviewed for the position Tuesday.
He was Kubiak's defensive coordinator in Houston from 2011-13 and replaced him as interim coach when Kubiak was fired by the Texans in December 2013.
Phillips has also coached the Saints, Cowboys, Bills and Broncos, where he went 16-16 from 1993-94.
He was out of football last season for the first time since 1975.