The Bears have posted 8-8 records in each of the last two seasons after a 12-4 campaign in Nagy's first season in 2018. Chicago's 2020 season ended with a first-round playoff loss to the New Orleans Saints on Sunday in Chicago.
Pagano, 60, took over as Bears defensive coordinator before the 2019 season. Chicago had the No. 4 defense in the NFL in his first season. The Bears ranked No. 14 in 2020.
Pagano joined the Bears after he served for six seasons as head coach of the Indianapolis Colts. He worked for nearly three decades as an NFL and college secondary coach before he joined the Colts.
He also served as defensive coordinator for the Baltimore Ravens and at the University of North Carolina.
Pagano began his NFL coaching career in 2001 as a secondary coach for the Cleveland Browns.