ORLANDO, Fla., June 5 (AP) -- The Orlando Magic are close to resolving their coaching fiasco by agreeing to a deal to dismiss Billy Donovan and hire Stan Van Gundy, according to reports Tuesday.

ESPN.com reported Donovan and the team were finalizing an agreement for his departure. Terms would prevent Donovan from coaching in the NBA for five years, sources told the outlet. The Orlando Sentinel reported that the Magic offered a contract to Van Gundy, a former Heat coach and current adviser to Pat Riley in Miami.

The Magic might have to compensate the Heat with money or a draft pick because Van Gundy is still under contract through June 30, 2008. Miami only has a first-round pick, No. 20 overall, in this year's draft, while Orlando currently has a first-rounder and three second-round selections.

Reached at his home Tuesday night by The Associated Press, Van Gundy declined comment when asked if either the Magic or Sacramento Kings - with whom he's interviewed twice, including this past Saturday - had made him any contract offers.

Riley was traveling and unavailable for comment, according to a Heat official.

Orlando and Donovan are laboring to finalize their futures fast - Donovan to save his consensus No. 1 recruiting class at Florida, the Magic to save face.

Donovan stunned the hoops world by agreeing to a five-year, $27.5 million deal on Thursday. He met the media on Friday, and a day later told the club he wanted out of the contract.

Donovan previously declined an offer to coach Kentucky, where his career began as an assistant.

Van Gundy was Orlando's second choice all along, but the Magic didn't think he'd be needed after Thursday. He was also being courted by the Kings, Charlotte Bobcats and Indiana Pacers. The Bobcats and Pacers have hired coaches, but the Kings' continued search worried Orlando.

Van Gundy coached the Heat just over two years before resigning last season, saying he wanted to spend more time with his family. Riley took over 21 games in and led the team to its first championship.