Kirk Herbstreit and Lee Corso break down what it means for Houston to hire Dana Holgorsen away from West Virginia. (0:52)

The Houston Cougars are finalizing a deal to make Dana Holgorsen their next head coach and are expected to announce his hire as early as Tuesday, a source with knowledge of the search told ESPN.

The West Virginia coach, who is 61-41 with the Mountaineers, will receive a five-year contract worth $20 million, the source said. It would make him the highest-paid coach of a Group of 5 program.

SBNation.com first reported the news of Holgorsen's imminent hiring and contract figure.

Holgorsen will return to familiar stomping grounds, where he spent two seasons as the Cougars' offensive coordinator in 2008-09 under then-head coach Kevin Sumlin. Holgorsen will succeed Major Applewhite, whom the Cougars fired Sunday after two-plus seasons with the program.

Houston made Holgorsen its top target in its search but timing dictated it wait until the new year, as his buyout to get out of his contract at West Virginia dropped from $2.5 million to $1 million on Tuesday.

Houston also spoke with USC offensive coordinator Kliff Kingsbury, a former Houston assistant, and Cal defensive coordinator Tim DeRuyter about its vacancy, according to a source.

Since the end of the season, West Virginia and Holgorsen had been negotiating an extension, pay raise and larger buyout on his contract, according to a source.

But Holgorsen asked for more than West Virginia was willing to offer, leading to a stalemate.

Another source told ESPN that Holgorsen has not been in touch with his coaching staff since the 34-18 loss to Syracuse in the Camping World Bowl. Holgorsen stayed in Orlando after the game instead of returning to the team.

ESPN's Jake Trotter and Adam Rittenberg contributed to this report