HOUSTON -- The Houston Texans hired Wade Phillips as their new defensive coordinator Wednesday, hoping the fired head coach of the Cowboys can turn around a unit that sank toward the bottom of the league last season.

Phillips was the head coach in Dallas but was fired in midseason after a 1-7 start. He joins Gary Kubiak's staff two days after the Texans fired defensive coordinator Frank Bush, secondary coach David Gibbs, linebackers coach Johnny Holland and assistant linebackers coach Robert Saleh.

A source told ESPN.com senior NFL writer John Clayton that Phillips' deal is worth $2.1 million over three years. The contract makes Phillips the highest-paid defensive coordinator in the NFL.

The Texans (6-10) lost eight of their last 10 games, mostly due to a defense that ranked as one of the NFL's worst. Houston finished 30th in yards allowed (386.6 per game) and last against the pass (267.5 yards per game).

Phillips becomes the third defensive coordinator in Kubiak's tenure, which began in 2006 and was on tenuous ground until owner Bob McNair said this week that he was sticking with his head coach. Bush and his predecessor, Richard Smith, had no previous experience at the position, and McNair and Kubiak both said they needed someone with a more proven track record this time.

The 63-year-old Phillips, a defensive coordinator most of his career, ran the defense in Denver from 1986-92, overlapping Kubiak's playing career as John Elway's backup for the Broncos.

The connection between the two goes back to the late 1970s, when Kubiak was a ball boy for the Oilers, who were coached by Wade's father, Bum. The elder Phillips showed up at Texans practice a week ago and chatted with McNair, sparking speculation that his son was in line to join the team.

The Texans' defense was bad from the start this season, yielding 410.5 yards through the first six games. The Texans only started 4-2 because the offense topped 30 points in each of the victories.

Pro Bowl middle linebacker DeMeco Ryans ruptured his Achilles tendon in the sixth game, and the defense never improved.

Kubiak also paid for his gamble to start rookie Kareem Jackson and second-year pro Glover Quin at cornerback. Houston gave up a league-high 33 touchdown passes and the secondary was beaten repeatedly on long receptions late in games.

The slide in the standings started after the bye week, in a 30-17 loss to Indianapolis. The unit seemed to show improvement in a 20-0 win over Tennessee, but the deficiencies in the secondary emerged again in losses to Philadelphia, Baltimore, Tennessee and Denver.

The pass rush was also an issue. Defensive end Mario Williams had 8½ sacks through the first 13 games, but then went on injured reserve with a sports hernia. Houston had 30 sacks this season to rank 23rd overall.

Phillips likes a 3-4 defensive alignment, which would be a change from the 4-3 that the Texans have played the last two seasons. Kubiak said Monday that he didn't care what scheme his new coordinator runs as long as it works.

A 3-4 scheme would require Williams and fellow defensive end Antonio Smith to adjust their techniques and attack more to the inside of the line than the outside.

"If it doesn't suit you, it doesn't suit you," Smith said. "I think that sometimes players get a bad rap in making a decision that best suits them and the longevity of their career, and half the time they're looked at and seen in a bad light because they want to keep their career going on the same course that it was going on. And with a change of defense that doesn't suit you, you're going right on the road to ending your career, if you don't perform at that position.

"Now, if it suits, it suits," Smith said. "And if it's feasible, I can do it. But if it's not, it's just not."

Williams also said the Texans will need to get a massive nose tackle to clog the middle to make a 3-4 alignment work.

"We've got big guys, but it's just a totally different animal," he said.

Information from ESPN.com's John Clayton and The Associated Press contributed to this report.