After a remarkable franchise turnaround, Portland Trail Blazers coach Terry Stotts is nearing agreement on a multiyear contract extension, league sources told Yahoo Sports.

The Blazers hold an option on the third and final year of Stotts' contract for 2014-15, but that'll likely be torn up and replaced with the new deal.

Blazers general manager Neil Olshey and Stotts' agent Warren LeGarie have been working on the deal, and it's expected to be finalized in the near future, league sources said.

Before losing to the San Antonio Spurs in five games in the Western Conference semifinals, Stotts helped transform the Blazers with a 21-game regular-season improvement (54-28) and a seven-game first-round playoff series victory over the Houston Rockets – the franchise's first in 14 years.

Under Stotts, forward LaMarcus Aldridge has re-established himself as one of the elite players in the NBA, and young point guard Damian Lillard has blossomed into a star.

Olshey hired Stotts two seasons ago, shortly after taking over the organization. This is Stotts' third head-coaching job after stays in Milwaukee and Atlanta. As an assistant coach to Rick Carlisle, Stotts won an NBA championship with the Dallas Mavericks in 2011.