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 The person spoke on the condition of anonymity because the team planned an 11 a.m. Wednesday news conference to announce the deal. The Red Wings announced plans for a news conference, but didn't release details.
Both Babcock and the Red Wings expected to reach an agreement shortly after the season ended last week with Detroit's win at Pittsburgh, where the team hoisted the Stanley Cup.
"I'm not going anywhere," he said during the finals. "We just have a couple details to fix."
General manager Ken Holland agreed.
"As soon as the season is over, we'll get it done," Holland has said. "I think it'll only take a meeting or two to put the finishing touches on it."
Babcock led Detroit to a title in his third season in charge after helping the franchise earn the most points in the regular season for the second time in three years. The team tied for the most points in the league during Babcock's second season, then lost in the Western Conference finals.
Babcock is a finalist for the Adams Award, which goes to the coach recognized as the best in the NHL each season.
He was hired from Anaheim to replace Dave Lewis, who was not offered a new contract when the NHL resumed play three years ago following the lockout.
"It's been really good deal for me, and I hope it's been good for them," Babcock said earlier this month. "We've won a lot of games. Obviously, we need to win another.
"We live in a great spot and my family is really happy here. We're around great people at home and here at the rink, where we work for a great people and a great owner."
The third season of Babcock's deal will coincide with his oldest child's senior year in high school.
Babcock's coaching style has proven to be a perfect fit for the Red Wings, who have learned to drive to the net, compete for pucks in the corners and finish checks all over the ice.
"Everyone said we weren't tough or physical enough," goaltender Chris Osgood said during the playoffs. "He's instilled in us the need to play physical and for everybody to play stronger."
Just before the Stanley Cup finals started, Babcock's steely glare and sharp tongue vanished in public for perhaps the first time in three seasons with the Red Wings.
A simple question stirred emotions Babcock usually hides.
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"What would it mean to you to have your name on that Cup," a reporter had asked Babcock.
Sigh.
Pause.
"When I've seen it out and around, I haven't gone near it," Babcock said at the time. "When I saw it at the Hockey Hall of Fame, I took the time to read all the names on it.
"I'm not thinking about that -- about my name."
Babcock then paused again and took a sip of water, trying to keep his composure, before finishing his answer.
"It would be nice," he said softly.
After walking away from the news conference, Babcock acknowledged that the question tugged at his emotions.
"Yeah, no question it did," he said then. "The biggest thing is, I believe in the process and when you get ahead of yourself things don't work the way they should."
Babcock enjoyed reaching the pinnacle of his career last week in Pittsburgh, surrounded by family, including his three children who walked with him from the postgame news conference to a jubilant and champagne-drenched dressing room.
"To be able to share this journey with the guys and to be able to share it with the city of Detroit, and obviously my family, that's very emotional," he said after helping the Red Wings win their 11th Cup in franchise history. "I'm sure I'm going to have some emotional moments in the next week just thinking about it.
"But to have your name on the Stanley Cup, pretty special."
[Associated Press; By LARRY LAGE]
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