Price, who lifted Washington State from Pacific-10 doormat to national title contender, replaces Dennis Franchione, who quit Alabama for Texas A&M on Dec. 5.
Alabama athletic director Mal Moore said he has known Price for years.
``I feel we have hired an outstanding person as well as an excellent football coach,'' Moore said in a statement posted on the athletic department Web site.
``We are excited about Mike becoming part of the Alabama family, and we look forward to this new era of Alabama football,'' said Moore.
A news conference was planned for 1 p.m. CST. to introduce Price in person.
Price takes over a program in the midst of NCAA probation. The Crimson Tide (10-3) was banned from a bowl this season and next as part of an NCAA penalty that also includes heavy scholarship reductions.
The violations occurred before Franchione arrived, but the coach said the sanctions were a major factor in his departure for A&M.
Price, 56, broke the news of his departure to his WSU players Tuesday afternoon, then boarded a private jet for Alabama.
It was unclear when Price would take over at 'Bama because he previously has said he would coach the Cougars in the Rose Bowl against Oklahoma on Jan. 1.
The No. 7 Cougars (10-2) rose as high as third in the Bowl Championship Series standings this season, unprecedented heights for the school based in tiny Pullman, Wash.
But the prestige and pay at Alabama, one of the nation's premier programs, prompted Price to end his 14 years at WSU.
``I just can't pass it up,'' Price told the Eastside Journal of Bellevue, Wash. ``I'm getting up there (in age). I've got to do this for my family.''
Price has taken the Cougars to five of the nine bowl games in team history, including the upcoming Rose Bowl.
Price said Washington State officials agreed that defensive coordinator Bill Doba would become the Cougars' new coach. Washington State planned a news conference Wednesday to discuss the coaching situation.
Doba was one of Price's first hires at WSU in 1989.
The Alabama job is expected to pay well over $1 million a year, a substantial raise over the $900,000 that Price could make with incentives at WSU.
Earlier in the week Price had called the Alabama job ``the premiere coaching position in the country.''
Price, who often wears his emotions on his sleeve, said the Tuesday afternoon meeting with players was emotional, and he regretted leaving the impression with players earlier this week that he was staying at WSU.
``If you promise somebody something and you don't do it, that's not right,'' Price said. ``I hope they can find it in their hearts to understand.''
Players agreed emotions ran high at the team meeting.
``There were a lot of different emotions and people in there,'' defensive tackle Jeremey Williams told reporters. ``We thought he'd be here forever.''
``We are all a little bit hurt,'' defensive end Isaac Brown added. ``I feel like somebody's leaving me.''
Price led Washington State to a share of the Pac-10 regular-season title with Southern California this year, and the Cougars won the Rose Bowl berth by virtue of beating the Trojans in an overtime thriller.
As they rose in the BCS rankings, the Cougars briefly flirted with the possibility of winning the national title, before a stunning loss to rival Washington in triple overtime ended those hopes.
Price has had an unremarkable 83-77 record as head coach of the Cougars since 1989. The back-to-back 10-2 records of the past two seasons are his first consecutive winning seasons at WSU.
But he is second in school history behind the 93 wins posted by O.H. Hollingbery from 1926-1942.
A former backup quarterback for WSU, Price helped develop quarterbacks Drew Bledsoe, Ryan Leaf and Jason Gesser.
His 1997 team, led by Leaf, electrified Cougars' fans, reaching the Rose Bowl for the first time since 1931, and bringing an infusion of fans, money and top recruits to a program that often played a weak second fiddle to the likes of UCLA, Southern Cal and Washington in the Pac-10.
Located in a farm town of 25,000 people 300 miles east of Seattle, Pullman could be a tough sell to blue-chip recruits.
After a close loss to Michigan in the 1998 Rose Bowl, Washington State posted records of 3-8, 3-9 and 4-7, and there were rumblings that Price would be fired. But last year's team went 10-2 and beat Purdue in the Sun Bowl.
Price earlier in the week told UCLA officials that he was not interested in that job, which became vacant after Price's friend Bob Toledo was fired.
Price was not Alabama's first choice.
Last week, New Orleans Saints assistant Mike Riley turned down the job, and several days earlier South Florida coach Jim Leavitt withdrew his name from consideration.
http://accesswdun.com/article/2002/12/186489