Another league source said the contract was for two seasons with a team option for a third year.
The Pistons zeroed in on Kuester on Monday after contract negotiations with ESPN analyst and former Dallas Mavericks coach Avery Johnson broke down over the weekend. Kuester, a former Pistons assistant coach under Larry Brown from 2004-06 and an NBA assistant coach since 1990, is considered to be one of the most qualified lieutenants in the NBA, having been an assistant for six NBA teams and having worked under top coaches such as Brown and Cleveland's Mike Brown. Kuester is a former head coach at Boston University and George Washington.
A formal announcement will come later this week.
The Pistons spoke with Avery Johnson about replacing Michael Curry, but talks with the former Dallas Mavericks coach ended Tuesday.
Detroit also was considering bringing back former Pistons coach Doug Collins, but he withdrew his name from consideration last week shortly after Curry was fired. Boston Celtics assistant Tom Thibodeau was also a candidate.
The Pistons are clearly in a rebuilding mode, revamping their team from a veteran-laden one to a franchise counting on players in their mid-20s.
Gordon is 26 and Villanueva turns 25 next month, potentially entering the prime of their careers, after Billups and Wallace were at their best when Detroit won the NBA title five years ago.
Detroit's fifth coach in nine seasons -- following Curry, Flip Saunders, Larry Brown and Rick Carlisle -- will have an interesting choice to make if the roster remains intact.
While the 6-foot-11 Villanueva can easily slip into the depleted frontcourt, the 6-3, 200-pound Gordon does not seem to have a spot because he's a natural shooting guard as is Richard Hamilton.
Gordon was voted the NBA's top reserve in 2005 and if he accepts that role again, the Pistons would have an intriguing three-guard rotation with him, Hamilton and 23-year-old Rodney Stuckey.
Gordon or Hamilton may have a problem with coming off the bench, though, and Detroit's next coach could have to deal with poor chemistry just as Curry did.
Before the Pistons endured misery last season, they won the 2004 NBA title under Brown and came within a win of repeating with him in the middle of a six-year streak of advancing to at least the Eastern Conference finals.
That impressive run began when Carlisle, who is now Dallas' coach, was put in charge of an NBA team for the first time and it looks as if president of basketball operations Joe Dumars' rebuilding plan includes going with another inexperienced head coach.
The 54-year-old Kuester played for the Dean Smith-led Tar Heels. He was drafted in the third round of the 1977 NBA draft by the Kansas City Kings and played for them, Denver and Indiana during his three-season career in the league.