Terms of the deal were not immediately disclosed, with final details still being agreed upon.
Rivers, who has been the head coach of the Celtics since 2004, had his contract expire at the end of the 2010-11 season, which ended with Wednesday night's loss to the Miami Heat, but he immediately indicated he wanted to return, saying after Game 5, "I'm a Celtic and I love our guys. I want to win again here ... "
After debating retirement following the 2009-10 season, Rivers ultimately returned to the Celtics' bench and led them to a 56-26 regular season record and a fourth-straight playoff appearance.
Rivers has a 336-238 record with Boston, and has led the Celtics to the playoffs in four of his seven seasons, winning the NBA Finals in 2007.