The option will be picked up as early as Thursday and no later than Friday. Once the Texans officially notify Schaub of this with a letter, the quarterback will be obligated to Houston for the next three seasons at roughly $28 million.
The move comes in the same week they extended head coach Gary Kubiak's contract through 2012.
Schaub initially signed a six-year, $48 million contract with the Texans in March 2007. The deal also included an option bonus payment of $10 million due no later than five days after Super Bowl XLIV, which will be played Sunday in Miami. With Houston having until the end of next week to do it, they will do it as early as Thursday.
After the season ended, Texans owner Bob McNair told reporters that his team planned to pick up the option in Schaub's contract, saying, "He's really been one of the best quarterbacks in the league this year."
And now he will be paid like it. Schaub led the league in passing yards with a franchise-best 4,770. He led Houston to its first winning record in franchise history, a 9-7 mark that left the Texans just short of making the postseason.
Adam Schefter is ESPN's NFL Insider.