John McClain of the Houston Chronicle first reported the deal was complete and also noted Houston finalized terms to make Brian Gaine its new general manager. Ian Rapoport of the NFL Network added the coach and GM are both under contract through the 2022 campaign.
Alex Marvez of Sporting News previously reported O'Brien planned to tell Texans owner Bob McNair he wanted to leave the organization if general manager Rick Smith stayed due to "ongoing friction" within the pair's "working relationship."
ESPN's Adam Schefter provided a statement from Smith about taking time away to focus on family matters after the team's season ended.
"Effective immediately, I have chosen to take an extended leave of absence to focus my attention and intention on my wife's complete recovery from her recent diagnosis of breast cancer. We are faithful and trust in God's promise of healing and wholeness. I am eternally grateful to the McNair family for their unwavering support during this trying time. This was an extremely difficult decision for me to make as I love this organization and every member of this team both on and off the field. I remain committed to our quest to bring a championship to the city of Houston, yet my family needs me now and they are my priority."
It's unclear what role Smith will hold when he returns from his leave of absence.
Houston posted a 4-12 record this season in large part due to an insurmountable number of key injuries. The team lost standout rookie quarterback Deshaun Watson, superstar defensive lineman J. J. Watt and stalwart linebacker Whitney Mercilus along with several depth assets.
The frustrating campaign dropped O'Brien's overall record with the Texans to 31-33 after three straight 9-7 seasons since joining the franchise in 2014. They made the playoffs in both 2015 and 2016.
The track record is formidable given the quarterbacks on the 48-year-old coach's rosters over the last four years. Aside from Watson, who looked like a budding star in seven games before getting hurt, the Texans' QBs during O'Brien's tenure include: Ryan Fitzpatrick, Case Keenum, Ryan Mallett, Tom Savage, Brian Hoyer, T.J. Yates and Brock Osweiler.
While Keenum has enjoyed moderate success with the Minnesota Vikings during the current campaign, that's mostly a group of also-rans. There certainly isn't a franchise signal-caller in the group, which makes three consecutive winning seasons a more noteworthy accomplishment.
In mid-December, O'Brien responded to questions about his future by saying he wanted to stay with the Texans with one year left on his initial deal.
"Sure. I enjoy being the head coach of the Houston Texans," he told reporters. "I have a great relationship with these players. I'm going to continue to coach hard until they tell me I'm not coaching here anymore.
"I signed a five-year contract. I expect to be back, but these decisions aren't made by me. I don't have any control over those things. All I can control is how I coach the team and how I work with the staff and the people around here, and that's what I try to do."
Ultimately, the decision to keep O'Brien doesn't come as a surprise, but there will be pressure on him to produce a bounce-back season in 2018. While the extension prevents him from entering the campaign under lame-duck status, it likely doesn't completely remove him from the hot seat.
The Texans should be in much better position to contend with the returns of Watson and Watt, though. They are the most important players on the team, and getting 16 games from both next fall would go a long way in getting Houston back into the playoffs.