Discussions on a contract could begin soon, league sources said.
Detroit's ownership and management reached a consensus on Cheeks as their choice, league sources said.
Cheeks was a finalist for the job along with another ex-Portland Trail Blazers coach, Nate McMillan.
Detroit let go of Lawrence Frank after two seasons as head coach in April.
Cheeks, who has been on staff with the Thunder for four seasons, has had two previous stints as an NBA head coach with Portland (2001-05) and Philadelphia (2005-08). He reached the playoffs twice in Portland ('02 and '03) and once in Philadelphia ('08). His career record is 284-286.
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