Sources: Chiefs' Justin Houston likely to be free agent or franchise tagged

Though the Kansas City Chiefs and two-time Pro Bowl linebacker Justin Houston have engaged in discussions on a long-term deal for nearly a year, the two sides remain "worlds apart," multiple sources familiar with the negotiations told Yahoo Sports.

It appears likely that Houston, who is in the final year of his contract, will either enter free agency or be given the franchise tag, according to multiple sources.

Given how well Houston has played this season, the Chiefs' failure to extend him is likely to prove costly if they intend on keeping him in Kansas City. Houston – who leads the league in sacks (10) through seven games – is on pace to have a career year while anchoring a Kansas City defense that ranks third in total defense and first in passing yards allowed per game. If his production remains consistent through the end of the season, Houston has a chance to join an elite group of pass rushers, who include Hall of Famers Derrick Thomas and Michael Strahan, in the 20-plus sack club.

Houston, 25, has cemented himself as one of the league's premier outside linebackers. He has 36 1/2 career sacks, 21 in his last 18 regular-season games. Since his rookie year in 2011, he has missed only five games (dislocated elbow). His salary this season is about $1.59 million.

At 6-foot-3, 258 pounds, Houston is far from one-dimensional. His athleticism and motor allow him to play the run very well and he has proven his ability to drop back and contribute in pass coverage.

Had the Chiefs signed Houston prior to the season – when his highest single-season sack total was 11 – they almost assuredly would have gotten him at a bargain compared to what it's going to cost them now. The Texans paid Watt $30.8 million (fully guaranteed) at signing in exchange for an additional six-year commitment from their star defensive end while the Rams paid Quinn $15.7 million (fully guaranteed) at signing in exchange for an additional four-year commitment.

In 2011, the Chiefs gave linebacker Tamba Hali a five-year deal through 2016 that pays him an average annual salary of $11.5 million. Since the start of the 2013 season, Hali has had fewer sacks and fewer tackles than Houston despite playing in four more games.

At this point, if the Chiefs want a long-term commitment from Houston, it's likely to cost them at least what Watt received. However, given that Watt and Quinn both signed extensions with two years left on their deals, and Houston is a mere nine games away from potentially heading into free agency, it's conceivable that he could fetch well north of what Watt received, league sources say.

If the Chiefs can't get a long-term deal done with Houston by the end of the year, they are going to have to make a decision: place the franchise tag on him and pay somewhere between $12.9 million and $15.5 million – fully guaranteed – for one year of service, or allow him to enter free agency. The ultimate amount to be paid will be determined once next year's salary cap is revealed (expected to be somewhere between $140 million and $150 million) and whether Houston is tagged as a linebacker or defensive end.

While the Chiefs have the option of placing the franchise tag on him twice, the two-year total for Houston's services would likely rise to somewhere between $26 million to $30 million, depending on the salary cap and what position Houston is designated.

If the Chiefs allow Houston to enter free agency and determine his value on the open market, it would all but guarantee his departure from Kansas City to sign with another team.