The Buffalo Sabres have reached an agreement in principle to hire former Pittsburgh Penguins coach Dan Bylsma, a person familiar with the talks told The Associated Press on Thursday.

The one holdup is a discussion over whether the Penguins are due compensation from the Sabres for hiring a coach who is still under contract with Pittsburgh, the person said. The person spoke on the condition of anonymity because the Sabres have not disclosed details of their search to replace Ted Nolan, who was fired last month.

A second person familiar with the talks told the AP that the Penguins are seeking a draft pick as compensation. That person spoke on the condition of anonymity because the negotiations between the two teams are private.

Though the Penguins relieved Bylsma of his duties a year ago, he is still under contract through June 2016.

Last year, the NHL approved a rule requiring a team to provide a draft pick as compensation should it hire another team's coach, general manager or president of hockey operations who is still under contract. The cost is a third-rounder if the hiring takes place during the offseason or a second-rounder if it happens during the season.

The agreement to hire Bylsma was reached after he spent a second consecutive day meeting with Sabres owners Terry and Kim Pegula and general manager Tim Murray in Buffalo.

Bylsma, who coached the Sidney Crosby-led Penguins to the 2009 Stanley Cup championship, takes over a franchise coming off consecutive last-place finishes and attempting to rebuild through youth. He will become Buffalo's third coach since Lindy Ruff was fired in February 2013.

Bylsma spent five-plus seasons in Pittsburgh, where he won a franchise-best 252 games and was the NHL's 2011 coach of the year, before being fired during a front-office shake-up a year ago.

Buffalo was forced to restart its search last week after losing out on Mike Babcock. The former Red Wings coach turned down the Sabres' offer to instead sign with Toronto.

The New Jersey Devils are the NHL's only other team with a coaching vacancy.

Bylsma and the Sabres have several connections.

The Pegulas were previously based in Pittsburgh before purchasing the Sabres in February 2011. Terry Pegula was such a Penguins fan that he named his beloved dog Sidney.

Though the Penguins enjoyed plenty of regular-season success under Bylsma, they faltered in the playoffs after winning the Cup in 2009. They were twice knocked out in the first round and reached the Eastern Conference final just once more, in 2013, when they were swept by Boston.

The Sabres have missed the playoffs in each of the past four seasons and haven't won a playoff series since 2007, when Buffalo reached the Eastern Conference final.

The Sabres have spent the past three seasons adding youth and stockpiling high draft picks. Buffalo has the No. 2 choice in the draft next month for the second consecutive year and is expected to select Boston University center Jack Eichel.

Bylsma got his NHL coaching break in February 2009 during his first season with the Penguins' Wilkes-Barre/Scranton affiliate. He was promoted to Pittsburgh to replace Michel Therrien with 25 games left in the season. The Penguins finished out 18-3-4 to make the playoffs, and then went on to clinch the franchise's third championship by defeating Detroit in Game 7 of the Cup finals.

From Grand Haven, Michigan, Bylsma is a former NHL forward, who made his professional debut by playing two games with the Sabres' American Hockey League affiliate in Rochester in 1992-93. After bouncing around the minors, he eventually played parts of nine seasons with the Los Angeles Kings and Anaheim Ducks before retiring in 2004.

___

AP Sports Writer Will Graves in Pittsburgh contributed to this report.