ESPN reported Saturday night that Pagano will be fired after the Colts conclude their regular season against the Houston Texans on Sunday afternoon.
Indianapolis is 3-12 entering Week 17 and will miss the playoffs for the third straight season as it has struggled without star quarterback Andrew Luck, who has not played due to a shoulder injury.
The Colts will complete their worst season since going 2-14 in 2011 when Peyton Manning sat out with a neck injury. That led to Manning being traded to Denver and the Colts using the top overall pick to select Luck out of Stanford.
Pagano took over in 2012 and posted three straight 11-5 seasons. The Colts lost the AFC title game to the New England Patriots in January 2015 and since then they are 19-27.
Luck threw 40 touchdowns during the 2014 season but missed nine games in 2015. He threw 31 touchdowns in 15 games last season, but was placed on the physically unable to perform list when training camp opened after undergoing surgery on a partially torn labrum in January.
Luck appeared close to returning to practice in October, but the pain lingered and he was placed on season-ending injured reserve in November.
Without Luck, Jacoby Brissett has been Indianapolis' starting quarterback after being obtained from New England in the first week of September.
Heading into Sunday, Pagano is 52-43. The 57-year-old missed 12 games in 2012 to undergo treatment for acute promyelocytic leukemia, and doctors later announced the cancer is in remission.
Before joining the Colts as a first-time head coach, he was the defensive coordinator of the Baltimore Ravens in 2011. Pagano also was the secondary coach with Baltimore from 2008 to 2010, the defensive backs coach with the Oakland Raiders from 2005 to 2006 and the secondary coach with the Cleveland Browns from 2001 to 2004.
However, the Colts' defense struggled under Pagano. They finished 20th or worse in total defense in five seasons and enter Sunday ranked 31st this season.
The Colts also faltered against the Pittsburgh Steelers and New England. Against those teams, the Colts were a combined 0-8.