The Miami Dolphins hired San Francisco 49ers offensive coordinator Mike McDaniel as their next head coach Sunday, the team announced.

The two sides inked a four-year contract, a source told ESPN's Adam Schefter.

McDaniel was a finalist for the Dolphins job, along with Dallas Cowboys offensive coordinator Kellen Moore and former Buffalo Bills offensive coordinator Brian Daboll, who the New York Giants named as their head coach on Jan. 28.

He's interested in keeping several of Miami's defensive assistants under contract, including coordinator Josh Boyer, sources told NFL Network's Ian Rapoport.

The 38-year-old McDaniel, who is multiracial, is the first minority head coach hired in this cycle, meaning the 49ers will receive a third-round compensatory pick in 2022 and 2023 under the Rooney Rule, according to NFL Network's Tom Pelissero.

McDaniel joined San Francisco as its run game coordinator in 2017 and was promoted to offensive coordinator in 2021, helping the team rank seventh in total yards and 13th in points.

The Colorado native has worked alongside 49ers sideline boss Kyle Shanahan throughout most of his coaching career. McDaniel was an assistant for the Atlanta Falcons in 2015 and 2016 when Shanahan coordinated one of the NFL's most prolific recent offenses and helped the team reach Super Bowl LI.

McDaniel was also the wide receivers coach for Washington's infamous 2013 coaching staff, which included Shanahan, current Green Bay Packers coach Matt LaFleur, and Los Angeles Rams coach Sean McVay.

The Dolphins began looking for a new head coach after firing Brian Flores three seasons into his five-year contract on Jan. 10.

McDaniel will inherit a Miami offense with several question marks. The club averaged only 20.1 points per game in 2021, ranking 22nd in the league. The Dolphins particularly struggled to move the ball on the ground, averaging just 3.5 yards per carry.

One of McDaniel's main challenges will be helping develop quarterback Tua Tagovailoa, who has yet to meet expectations since being drafted fifth overall in 2020. Tagovailoa tossed only 16 touchdowns against 10 interceptions through 13 appearances in 2021 while averaging just 6.8 yards per pass attempt.

Miami posted a 9-8 record in 2021 despite starting the campaign 1-7. The Dolphins haven't made the playoffs since the 2016 season.