Bill O'Brien has emerged as the overwhelming favorite to become the next coach of the Houston Texans, and the two sides are working to get a deal in place within the next week, league sources told ESPN.

O'Brien met with the Texans this week after Christmas at his home in Cape Cod, resulting in intensified discussions they hope will culminate with a finalized contract, the sources said.

The Texans still have a short list of candidates in case talks break down with the Penn State coach, sources added.

The Texans also are being assisted by Jed Hughes, who heads a sports executive search firm, per sources.

Until anything is final, the Texans have scheduled other interviews with candidates such as San Diego Chargers offensive coordinator Ken Whisenhunt. They also are known to have interviewed former Chicago Bears coach Lovie Smith and interim coach Wade Phillips.

The Texans had been doing due diligence on O'Brien, including his six-year stint with the New England Patriots. The feedback has been strong in his favor, sources said, which motivated Houston to commence negotiations to get a deal in place.

O'Brien, 44, just finished his second season at Penn State, where he was the Big Ten coach of the year in 2012, followed by a 7-5 season this year while playing with a freshman quarterback (Christian Hackenberg) and amid heavy sanctions placed on the Nittany Lions after the Jerry Sandusky scandal.

Bill O'Brien has emerged as the overwhelming favorite to become the next head coach of the Texans, according to sources. Rich Barnes/USA TODAY Sports

O'Brien was a New England assistant from 2007 until 2012. He eventually became the offensive coordinator for a Patriots team that lost to the New York Giants in Super Bowl XLVI.

After O'Brien interviewed with the Philadelphia Eagles and Cleveland Browns last offseason, he returned to Penn State. But his interest in any prominent NFL head coaching job is not a secret.

As a condition to returning to Penn State for 2012, O'Brien and the school agreed to an amended contract that lowered his buyout to join an NFL team from $19.33 million to $6.48 million. There had been conversations to further reduce the NFL buyout.

Incoming Penn State recruit Thomas Holley, the school's second-highest ranked recruit in 2014, told ESPN.com that he had a conversation Saturday with O'Brien, who told the defensive lineman that he way staying with the Nittany Lions.

"He said it's not true, he's going to be at Penn State and he's going to be there for me when I get there," Holley told ESPN.com.

The Texans will pick first overall in the 2014 NFL draft and are expected to target a quarterback for the future.

Texans general manager Rick Smith was in Orlando on Saturday night to scout Louisville quarterback Teddy Bridgewater and Miami quarterback Stephen Morris. Smith will be in El Paso, Texas, on Monday to see Oregon quarterback Marcus Mariota in the Alamo Bowl and at the Sun Bowl on Tuesday to watch Virginia Tech's Logan Thomas play UCLA's Brett Hundley. On Wednesday he's scheduled to be at the Fiesta Bowl to watch Baylor's Bryce Petty play UCF's Blake Bortles before finishing the week at the Orange Bowl to watch Clemson's Tajh Boyd and Ohio State's Braxton Miller.

The Texans, who lost their 14th straight game Sunday to finish 2-14, are searching for a replacement for Gary Kubiak, who was fired earlier this month.

ESPN.com's Tom VanHaaren contributed to this report.