Tennessee officials hoped to announce the hiring of Schiano Sunday afternoon.
Schiano became the focus of the Volunteers' search after Mississippi State coach Dan Mullen reportedly reached agreement to become the new head coach at Florida.
Former Tampa Bay Buccaneers coach Jon Gruden was also among the targets of the Tennessee search, with CBS Sports reporting the school was willing to offer Gruden a deal that would pay him upwards of $10 million a year.
But now it appears the Volunteers have settled on Schiano.
Schiano is currently Ohio State's defensive coordinator, be he has a relationship with Tennessee athletic director John Currie.
He went 68-67 over 11 seasons at Rutgers, after taking over one of the worst programs in the country. The Scarlet Knights made six bowl appearances under Schiano.
Schiano was hired by the Buccaneers following the 2011 season, but he was fired after two seasons with an 11-21 record.
Schiano, 51, was out of coaching for two years, and he has spent the past two seasons as Urban Meyer's assistant head coach and defensive coordinator with the Buckeyes.
The Volunteers fired Butch Jones on Nov. 12, the day after they lost 50-17 at Missouri to fall to 0-6 in Southeastern Conference play. The Volunteers then lost their final two games to finish 4-8 overall and 0-8 in the conference.
Jones had a 34-27 record in five seasons at Tennessee.