The Portland Trail Blazers announced on Tuesday evening that the team has hired former Dallas Mavericks assistant Terry Stotts as its new head coach.

“Terry is one of the elite offensive minds in the NBA, has extensive experience with multiple organizations and was instrumental in the Dallas Mavericks winning the 2011 NBA Championship,” general manager Neil Olshey said in a statement. “He understands the vision for the future of the franchise, appreciates the process involved and will create an environment on the court that will produce championship habits.”

Stotts, who was Rick Carlisle’s lead assistant for the past four seasons, has been a head coach twice before, lasting two seasons with both the Atlanta Hawks (2002-04) and the Milwaukee Bucks (2005-07). He compiled a 115-168 record during those two stints.

Stotts replaces Kaleb Canales, who served as interim coach after Nate McMillan was fired. The Oregonian reports that there has been speculation that Canales will be retained as a member of Stotts’ staff, but there has been no official word.

UPDATE: Here’s the official word on Canales from Jason Quick of The Oregonian:

Blazers GM Neil Olshey says Kaleb Canales will remain on Blazers staff as an assistant coach—
Jason Quick (@jwquick) August 08, 2012

Jason Quick of The Oregonian reports that the Portland Trail Blazers’ two coaching finalists, Terry Stotts and Kaleb Canales, interviewed with owner Paul Allen in London on Friday.

Quick writes that Allen is expected to deliberate with general manager Neil Olshey and board of directors chair Bert Kolde and then make a decision in the coming days. Allen, who has a home in London and has his yacht docked there for the Olympics, declined an interview request from Quick.

Stotts is a two-time NBA head coach (Milwaukee Bucks, Atlanta Hawks) who is currently an assistant with the Dallas Mavericks. Canales is a former Blazers video intern who climbed the ranks and served as the team’s interim coach last season after Nate McMillan was fired.

Jason Quick of The Oregonian tweets that the Portland Trail Blazers have narrowed their coaching search to two candidates:

Terry Stotts and Kaleb Canales are the two finalists for the Trail Blazers head coaching position, The Oregonian has learned—
Jason Quick (@jwquick) August 02, 2012

Former Orlando Magic assistant Steve Clifford and Phoenix Suns assistant Elston Turner were eliminated after the four semifinalists had second interviews this week.

Perhaps not coincidentally, Stotts (with the Milwaukee Bucks and the Atlanta Hawks) and Canales (the Blazers interim coach) are the only two among the quartet with any head-coaching experience.

Canales earned a strong endorsement from general manager Neil Olshey when Olshey was hired in June.

No word on a timetable for a final decision.

Jason Quick of The Oregonian reports that the Portland Trail Blazers are down to four finalists for their vacant head coach position: interim coach Kaleb Canales, former Orlando Magic assistant Steve Clifford, Dallas Mavericks assistant Terry Stotts and Phoenix Suns assistant Elston Turner.

Stotts, who spent a total of four seasons guiding the Milwaukee Bucks and Atlanta Hawks, is the only one with head-coaching experience, other than the interim stint turned in by Canales.

Quick writes that all four will have second interviews in Portland next week, and general manager Neil Olshey will then make a recommendation to owner Paul Allen.

Quick later reported on Twitter the potential for an additional candidate:

The possibility for a 5th "mystery" candidate in the Trail Blazers' coaching search is in play, The Oregonian has learned.—
Jason Quick (@jwquick) July 25, 2012

The 5th "mystery" candidate is not represented by LeGarie or Kauffman, two of the three major agents in coaching circles.—
Jason Quick (@jwquick) July 25, 2012

If the Blazers turn to the 5th mystery candidate, it would be late in the process I'm told—
Jason Quick (@jwquick) July 25, 2012