A person with knowledge of the deal confirmed on condition of anonymity that Del Rio signed a four-year deal to replace interim coach Tony Sparano. The person spoke on condition of anonymity because an announcement had not been made. ESPN first reported the hiring.
Del Rio becomes Oakland's ninth head coach since the start of the 2003 season. The Raiders have the NFL's worst record in that span, having failed to produce a single winning season or playoff berth.
Del Rio replaces Sparano, who was elevated from offensive line coach during the past season to replace the fired Dennis Allen and had hoped to keep the job. Oakland went 3-9 under Sparano after losing the first four games under Allen.
The Raiders interviewed at least seven candidates but only Del Rio got a formal second interview. He emerged as the favourite after Denver's season ended Sunday with a playoff loss to Indianapolis.
After meeting with owner Mark Davis in Denver during Denver's bye week, Del Rio had his second interview in the Bay Area on Tuesday with Davis and general manager Reggie McKenzie.
This marks the second straight time the Raiders hired a Denver defensive co-ordinator as their coach. Allen spent one year running the Broncos defence before being hired by McKenzie in 2012. He went 8-28 before getting fired last season.
Del Rio grew up in Hayward, just a short drive from the Coliseum. He went to Raiders games as a kid and even played a high school championship game at the Coliseum. His parents are still season-ticket holders and now will get the chance to watch their son coach their favourite team.
Del Rio has been defensive co-ordinator in Denver for the past three seasons, helping the Broncos win three straight AFC West titles.
Kansas City Royals bench coach Don Wakamatsu, a teammate of Del Rio's in football, basketball and baseball at Hayward High School, said he is thrilled Del Rio may get to go back and coach near his family.
Wakamatsu and Del Rio have stayed close through the years and Del Rio visited spring training when Wakamatsu managed the Seattle Mariners and came to San Francisco for the a World Series game in October.
"He's one of the best ones out there," Wakamatsu said. "I don't think they could have made a better hire. That's not just me as a friend talking. That's knowing the intelligence and leadership skills he has. I've always had utmost respect for him as an athlete, coach and friend."
Denver ranked third in total defence and tied for 16th in scoring defence this past season. The Broncos were third in total defence and 10th in scoring defence in Del Rio's three years with the team.
Before that, he was head coach in Jacksonville for nine seasons. Del Rio had a 68-71 regular-season record with the Jaguars and made the playoffs in 2005 and 2007, winning one playoff game in his second post-season trip. He was fired with five games remaining in the 2011 season.
He has extensive NFL experience, having played 12 seasons as a linebacker and coaching with New Orleans, Baltimore and Carolina before getting the head coaching job with the Jaguars.
This is just the fourth time the Raiders have hired a coach with previous head coaching experience. Neither Joe Bugel, Norv Turner nor Art Shell in his second stint managed to get into the playoffs.
Despite the 3-13 record last season, the Raiders do have some pieces to build around led by quarterback Derek Carr and linebacker Khalil Mack. Those two were part of a talented rookie class that also included guard Gabe Jackson, defensive tackle Justin Ellis and cornerback TJ Carrie.
The other candidates who interviewed for the job were former Raiders, Denver and Washington coach Mike Shanahan, Philadelphia offensive co-ordinator Pat Shurmur, San Francisco tight ends coach Eric Mangini, Seattle offensive co-ordinator Darrell Bevell and Indianapolis offensive co-ordinator Pep Hamilton.
Del Rio's hiring in Oakland might also facilitate the acquisition of unrestricted free agent nose tackle Terrance "Pot Roast" Knighton, who has thrived under Del Rio's tutelage in Jacksonville and Denver.
While Knighton has said repeatedly he wanted to stay in Denver, he recently told The Associated Press, "I want to be wherever Jack is. I'll just leave it at that."
AP Pro Football Writer Arnie Stapleton contributed to this report
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