Sean Payton and the New Orleans Saints have agreed to a five-year contract extension, a league source told ESPN.
The terms of the extension were undisclosed but may be similar to the deal that was earlier disapproved by the league, according to a league source. Team spokesman Greg Bensel confirmed Payton had agreed to a multiyear contract.
"Very happy it is official," Saints quarterback Drew Brees said in an email to the Associated Press. "Never had any doubts."
The Saints were given written permission by the NFL to negotiate a contract extension with the suspended Payton in November.
"I am pleased that Sean Payton will be our head coach for a long time," owner Tom Benson said in a statement. "Now we can focus our attention on building on the winning tradition with the Saints that Sean has played such a large role in."
The extension agreed upon by Payton and the Saints was rejected by the league because it contained a clause allowing Payton to leave if general manager Mickey Loomis was suspended or departed the organization.
Payton is the only coach in Saints history to win a Super Bowl, a title earned at the end of the 2009 season. But his legacy was tarnished by the NFL's bounty probe, as commissioner Roger Goodell ruled that Payton failed to exert proper institutional control over a cash-for-hits bounty program run by former defensive coordinator Gregg Williams from 2009-2011.
Although the Saints objected to the characterization of what coaches and players have said was nothing more than a performance pool for big plays, Goodell suspended Payton for the entire season. The commissioner also suspended Loomis for half of the season and assistant head coach Joe Vitt for six games.
Payton is 62-34 as in regular-season games as Saints coach and 5-3 in the postseason. During the three seasons before his suspension, the Saints won 41 regular-season and playoff games combined, more than any other team in the NFL.
Payton has primarily handled the offense in New Orleans, teaming up with Brees to break numerous NFL and club records. The single-season NFL records set by the Saints in 2011 included yards passing by a team (5,505) and a quarterback (5,476). The Saints also set a record for total offensive yards with 7,474.
Although speculation ran rampant that Payton essentially could become a free agent after this season and end up elsewhere, Brees repeatedly said he would be "shocked" if Payton ended up anywhere but New Orleans next season. Brees is under contract with the Saints through the 2016 season, and Payton was the driving force in the Saints' effort to acquire Brees as a free agent in 2006.
Without Payton on the sideline this season, the Saints missed the playoffs for the first time since 2008. Brees remained prolific, but his 18 interceptions also tied for a league high heading into the final weekend of the season.
The Saints headed into Sunday's season finale against Carolina at 7-8, hoping to avoid their first losing season since they went 7-9 in 2007.
Payton is expected to return to the Saints immediately after the Super Bowl on Feb. 3, unless Goodell allows him to return earlier.
When Payton reports back to work, it will offically close the book on the bounty saga that has overshadowed the Saints' organization since the NFL first announced on March 2 that it found the Saints ran a program that paid improper cash bonuses for hits that injured opponents.
In addition to the suspensions of Payton, Loomis and Vitt, the Saints also were docked second-round draft choices in 2012 and 2013, though Goodell has said he potentially could restore the Saints' 2013 second-round choice and dock the team a later-round pick.
Meanwhile, four current or former Saints were initially given suspensions of varying lengths. Two Saints defensive captains, linebacker Jon Vilma and defensive end Will Smith, were among those suspended. Vilma was banned for the whole season and Smith for four games, but the players successfully challenged their punishment with the help of the NFL Players Association and never served a game.
Former commissioner Paul Tagliabue, appointed by Goodell to oversee the players' appeals, ruled the NFL probe was accurate in its findings that the Saints ran and improper program and attempted to cover it up, but that the evidence was not strong enough to warrant unprecedented suspensions for players who had been only fined for similar behavior in the past.
Information from ESPN NFL Insider Adam Schefter, ESPN's Ed Werder and The Associated Press was used in this report.