INDIANAPOLIS — Josh McDaniels has backed out of a deal to become the Indianapolis' Colts new coach, a decision that shocked the franchise hours after it announced his hiring.

The Colts confirmed McDaniels' decision in a statement Tuesday night after reports emerged that the Patriots' offensive co-ordinator had opted to stay in New England with coach Bill Belichick.

McDaniels had agreed to contract terms with the Colts to replace the fired Chuck Pagano, and a news conference had been scheduled for Wednesday at Lucas Oil Stadium.

Just a few hours later, the Colts said McDaniels informed them he would not sign the deal.

"Although we are surprised and disappointed, we will resume our head coaching search immediately and find the right fit to lead our team and organization on and off the field," the Colts said in the statement.

The Patriots and McDaniels' agent, Bob LaMonte, did not immediately respond to requests for comment.

"I'm speechless," former Colts receiver Reggie Wayne told NFL Network. "I've talked with people in the Colts organization and they feel like they've been hoodwinked."

It's also not clear how the Colts will proceed from here.

By spurning Indy after it waited 22 days for the playoffs to end, McDaniels leaves the reeling franchise as the only one without a coach — in early February. New England's defensive co-ordinator, Matt Patricia, left Belichick's staff a day after the Patriots' Super Bowl loss to become coach of the Detroit Lions.

Indy had interviewed several candidates for the job, including two that were hired by other teams — Matt Nagy went to Chicago and Mike Vrabel to Tennessee. Another potential candidate, Baylor coach Matt Rhule, had already announced he was returning to the college ranks before the Colts had settled on McDaniels, who at age 41 is considered one of the game's best young minds.

He's been considered a top-tier head coaching candidate for several years even though his only other coaching stint with Denver ended badly. He went 8-8 with the Broncos in 2009 and 3-9 in 2010 before he was fired with three games left in the season. He worked with the St. Louis Rams in 2011 before returning to New England in 2012, where he has been the offensive co-ordinator ever since.

And turning down his second chance, after agreeing to a deal with Indy, could make other teams outside of New England more hesitant to hire McDaniels. His decision will also have ramifications for the coaches who were set to join his staff.

It's unusual but not unprecedented in league history for a deal with a new coach to fall through at the last minute. McDaniels' move was eerily reminiscent of his mentor, Belichick, who resigned as coach of the Jets with a handwritten note less than a day after he was hired in 2000.

Although McDaniels never signed his contract with Indianapolis, his stint was even shorter. The team announced his hiring in on its Twitter account late Tuesday morning. Hours later, the Colts had deleted the tweet and replaced it with the statement about his withdrawal.

Pagano was fired Dec. 31 after the team finished 4-12 in a season without injured quarterback Andrew Luck.

Within days of Pagano's ouster, Colts general manager Chris Ballard interviewed McDaniels during the Patriots' post-season bye week. Two weeks later, reports indicated the deal was all but finished and potential suitors, like the New York Giants, started hiring other coaches.

Now the Colts find themselves in perhaps the toughest position of all — finding a new coach in February.

In Indianapolis, where the fan base already loathed the Patriots, McDaniels' sudden change of heart didn't go over well.

The City of Noblesville, a northern suburb of Indy, put this on Twitter: "Unlike Josh McDaniels, we stay true to our commitments. Noblesville street crews will be out tonight once winter weather hits you can 'do your job' tomorrow."

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