CHAPEL HILL, N.C. – North Carolina is currently in contract extension negotiations with head football coach Larry Fedora, according to a source familiar with the proceedings.

Fedora has directed UNC to an 11-1 (8-0) record in his fourth year at the helm. The 10th-ranked Tar Heels play No. 1 Clemson in the ACC Championship Game on Saturday.

“They are in discussions,” the source told InsideCarolina.com on Wednesday. “They want it to be a workable deal. They want him here for the long term.”

UNC is intent on elevating Fedora’s salary, as well as his assistant coaches’ pay, to that of a market-relevant rate, according to the source.

"I do think that we lag the market in a lot of our salaries and we’re going to continue to try to compensate people to get them to stay," UNC athletic director Bubba Cunningham said in a recent interview with IC.

Seven current ACC head coaches make more than $2.5 million per year, led by Jimbo Fisher’s $5.1 million salary at Florida State.

Fedora originally signed a seven-year deal worth $1.73 million before retention and performance bonuses in December 2011. He began earning annual retention bonuses after the 2014 season, which will escalate to $200,000 in Jan. 2016.

Fedora is scheduled to make $1,931,000 in 2015, according to USA Today, although that figure does not include his significant media and apparel contracts. UNC officials have not disclosed the value of his total financial package. His performance bonuses include a payout of 1/12 of his salary (roughly $29,100) for every ACC Coastal title, ACC Conference title and non-BCS bowl appearance, as well as double that amount for a BCS bowl appearance (now a New Year’s Six).

Coaching contracts are traditionally five years in length. UNC extended Fedora’s contract to seven years due to the self-imposed two years of probation associated with NCAA violations. In addition to the extra years, UNC elected to soften Fedora’s buyout due to the uncertainty surrounding the program.

Fedora’s current buyout is $250,000 if he decides to leave before January 2016. Cunningham provided insight into the low buyout during a radio interview on The David Glenn Show on Wednesday.

“I wanted to give him the opportunity, that if we had more severe sanctions than I anticipated back in 2011, he would have the opportunity to leave,” Cunningham said. “Fortunately, that didn’t come into play, hasn’t come into play. I just wanted to be very fair. And that’s the conversation that he and I have had from the moment we met in the interview process. What is right? What is fair? And how can I make this more and more appealing for you and for our students?”

Lowry Caudill, a UNC Board of Trustees member and the Rams Club chair, declined to comment on any potential contract negotiations in an interview on Wednesday. Caudill sits on the BOT’s Finance and Infrastructure Committee that approved a $25 million plan to build an indoor practice facility for the football program on Nov. 18.

“We want to be highly competitive in football,” Caudill said. “With that, we have to have facilities, we have to have top coaches and we have to retain top coaches. It’s hard to have sustained excellence without continuity and head coaching.”

Caudill was a member of the 10-person search committee in 2011 that led to Fedora’s hiring.

“We hired Larry four years ago next week,” Caudill said. “We thought when we hired him that he would be very successful at Carolina. We thought he could fit culturally, we thought he could bring a winning program on the field, and we thought that he could bring players in that would be very successful in the classroom, and he’s done that…

“He’s turned out to be exactly what we had hoped he would be. My hope, and our hope, is that he’s our coach for a long, long time.”