Sherman is believed to have a salary of about $3.2 million for this season. The new contract will likely pay him the same amount for each season.
Sherman's record in the past five seasons certainly justifies an extension. He is 53-27 during the regular season and his .663 winning percentage is tied for third best among active NFL coaches. The Packers have won three straight NFC North Division titles (2002-04) and made four straight playoff appearances under Sherman.
But many believed that Sherman's future in Green Bay was in doubt for a couple of reasons: Thompson may have wanted to hire a different head coach if he didn't feel comfortable working together with Sherman. Sherman's teams are only 2-4 in the playoffs.
Sherman was tight ends coach for the Packers in 1997-98. He went to Seattle to work as offensive coordinator under Mike Holmgren in 1999 before Wolf hired him as the Packers' 13th head coach.
"I've said this before and I'll say it again," Sherman said last week when Wolf was visiting training camp, "I wouldn't be in this position if it wasn't for Ron Wolf. He took a chance on a young coach, third year in the National Football League and first year coordinator ... He brought me back here. I wouldn't be here if it wasn't for Ron's willingness to take a chance on a guy. I owe Ron an awful lot, and I told him that. I'll always be indebted to him for that."