ESPN reports that D'Antoni signed a three-year deal late Sunday night worth $12 million and that a fourth year is a club option.
The decision came after weekend negotiations with Phil Jackson broke down, shocking a loyal fan base who clamored for the return of Jackson, who led the team to five NBA championships during his tenure. According to ESPN, Jackson's contract requests included $10 million to $15 million annually, a say in personnel decisions, including his eventual replacement, and the ability to skip certain road games. The requests weren't palatable to Lakers owner Jim Buss and General Manager Mitch Kupchack.
According to a league source, Jackson was "stunned" when the Lakers called to inform him they had chosen D'Antoni. Jackson was prepared to accept the job Monday if negotiations between his agent and the Lakers went well. Jackson's agent, Todd Musberger, was scheduled to fly to Los Angeles on Monday.
Multiple sources on Sunday said Jackson was 95 percent certain to return and had even contacted his former assistant coaches.
D'Antoni is known for a fast-paced, up-tempo offense that was successful during his time with the Phoenix Suns, where he also coached new Laker Steve Nash. Nash was the Suns' point guard and was named MVP twice.
"You'll see a better pace and a better flow to the game for all of us, offensively and defensively, and that's what's keeping our hopes very high," Lakers center Dwight Howard said.
The Lakers are hoping D'Antoni will be able to fly to Southern California on Wednesday so he can be formally introduced on Thursday.
Some fans are questioning the hiring of a coach who has never won a championship.
"He couldn't do it with Nash, what, eight, nine years ago? I don't think he's going to do it now," said fan Jose Arranda. "He's got a better chemistry, better players, but they're all kind of going...they're old."
ESPN Radio Host Mark Willard tried to ease frustrations Monday morning after the announcement.
"If there was a mistake made by the Lakers here, it wasn't that they didn't hire Phil Jackson, it was that they let everybody think they were going to hire Phil Jackson," he said.
Former Lakers star Mychal Thompson is confident the new coach will bring much needed excitement to Staples Center, reminiscent of his days on the Showtime Lakers in the 1980s.
"Kobe likes to run up-tempo, Dwight Howard can run like a guard, even Pau Gasol can get up and down the floor for a big guy, so I'm sure the players are very excited to play this up-tempo style," Thompson said.
Brown was fired as head coach Friday after failure to improve the team's slow 1-4 season start. Meanwhile, the Lakers' record improved to 3-4 during a weekend home stand with the Golden State Warriors and the Sacramento Kings. The team followed up their winless preseason with four losses in their first five regular-season games, the club's worst start since 1993.
D'Antoni resigned from the New York Knicks in March after knee surgery, which he is still recovering from. Interim coach Bernie Bickerstaff will remain with the team through at least the rest of the week, and D'Antoni is expected to begin coaching his first game next week against the San Antonio Spurs.
ESPN contributed to this report.