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Sources: Red Bulls to hire ex-Fire coach Osorio

When the Red Bulls parted ways with former coach Bruce Arena a month ago, the club was expected to search the world over looking for his replacement.

They went as far as Chicago.

The Red Bulls are set to name former Chicago Fire head coach Juan Carlos Osorio as the team's new head coach, according to sources with knowledge of the deal. The decision came after the Red Bulls and Fire reached an agreement on compensation for Osorio, who joined Chicago as head coach in July and helped lead the Fire to the Eastern Conference final. He had two years remaining on his contract with the Fire.

Osorio and the Red Bulls are putting the finishing touches on Osorio's contract, but the sides are expected to be reach an agreement this week. Ron Waxman, Osorio's New York-based agent, would not comment on the situation.

"Despite the Fire's best efforts to keep Juan in Chicago, he determined that he needed to leave Chicago for family and personal reasons," Fire President John Guppy said. "While we certainly respect his decision, the timing of the departure was unexpected and is unfortunate."

Osorio leaves Chicago after guiding the Fire to an improbable playoff run. He took over a last-place team with a 4-7-4 record and helped it post a 5-2-6 mark after the All-Star break. He then helped Chicago orchestrate a first-round series victory against D.C. United, which entered the playoffs with the best record in MLS.

Osorio replaces Arena, who was fired after posting an 18-16-11 record as head coach for a season and a half. The Red Bulls suffered first-round playoff exits in both seasons under Arena.

According to sources, the Red Bulls kept their coaching search limited to coaches with experience coaching in the United States. U.S. national team assistant coach Peter Nowak and Chivas USA head coach Preki were also candidates for the position.

The Red Bulls' hiring of Osorio is the second time the club has hired a Chicago Fire head coach. The MetroStars hired then-Fire coach Bob Bradley after the 2002 season to replace Octavio Zambrano. The MetroStars gave Chicago a first-round draft pick and the rights to forward Rodrigo Faria as compensation.

Osorio returns to the same club he helped guide to an Eastern Conference final in 2000 as an assistant coach when the team was known as the MetroStars. He served as Zambrano's lead assistant in 2000 (the most successful season in club history) and half of the 2001 season before joining the coaching staff at English club Manchester City.

Osorio spent five seasons with Manchester City, first as a conditioning coach before being promoted to full assistant coach, before leaving to become head coach of Colombian club Millonarios. He guided Millonarios to a fourth-place finish before accepting the Chicago Fire coaching position during the summer.

Ives Galarcep covers MLS for ESPNsoccernet. He is a writer and columnist for the Herald News (N.J.) and writes a blog, Soccer By Ives. He can be reached at The Associated Press contributed to this report.