The 49ers were choosing between Kelly and former Denver Broncos and Washington Redskins head coach Mike Shanahan, ESPN's Adam Schefter reported.
Kelly, the Philadelphia Eagles' head coach last season, was fired by the team before its final game of the season. He led Philadelphia to a 26–21 record in nearly three full years at the helm, with one playoff appearance.
The 49ers fired head coach Jim Tomsula after the team went 5–11 this season.
Kelly will only be responsible for coaching with the 49ers, as Trent Baalke will remain the team's general manager. Kelly also made personnel decisions for the Eagles.
The Eagles job was Kelly’s first in the NFL. He first rose to prominence as head coach of the Oregon Ducks, where he compiled a 44–5 record and earned a reputation as an offensive innovator.