After an afternoon of negotiations produced an agreement, Mike Shanahan signed a five-year contract to become executive vice president and head coach for the Washington Redskins.

Under the terms of the new deal, Shanahan will team with Redskins executive vice president and general manager Bruce Allen, but Shanahan will have the ultimate authority on football decisions.

Shanahan will appear at a 2 p.m. ET news conference Wednesday.

As the contract was being signed at the Redskins' training complex, Shanahan and team owner Dan Snyder posed together for a picture. Then, with the deal signed, Shanahan, his agent Sandy Montag, Allen and Snyder headed out for a celebration dinner.

Shanahan's contract is worth approximately $7 million a year, The Denver Post reported on its Web site. Now that Shanahan has been hired elsewhere, the Denver Broncos, who fired Shanahan one year ago, will recoup $7 million in offset money over the next two seasons under the terms of the agreement they had with the coach.