The people spoke on condition of anonymity because contract details and school approval were still being finalized.
ESPN first reported Penn State was close to hiring Allen.
Allen was fired last month by Indiana after eight years as head coach. The 53-year-old Indiana native went 33-49 with the Hoosiers, including 3-9 this season. He led Indiana to bowl games in 2016, ‘19 and ’20.
Allen was defensive coordinator at South Florida and Indiana before being promoted to head coach of the Hoosiers in 2017.
Penn State coach James Franklin is looking for a replacement for Manny Diaz, who spent the last two seasons as defensive coordinator before leaving earlier this month to become head coach at Duke. Penn State ranked first and third in the Big Ten in yards per play allowed in Diaz's two seasons.
Earlier this month, Franklin filled a vacancy at offensive coordinator by
No. 10 Penn State (10-2) faces No. 11 Mississippi (10-2) in the Peach Bowl on Dec. 30.
Penn State working to hire former Indiana coach Tom Allen as defensive coordinator, AP sources say
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