CHICAGO – After a remarkable franchise turnaround, Portland Trail Blazers coach Terry Stotts has reached agreement on a two-year contract extension, league sources told Yahoo Sports.

The Blazers picked up the 2014-15 option on Stotts' previous contract and gave him an additional two years, the second of which is a team option. The total extension runs through the 2016-17 season with the first two years guaranteed.

Blazers general manager Neil Olshey and Stotts' agent, Warren LeGarie, had been working on the deal, and it was finalized on Thursday.

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 six-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.