Strong will be paid $5 million in the first year, with an annual $100,000 raise for the coach chosen to succeed Mack Brown. The regents met by phone Monday and approved the contract by a unanimous vote.
Strong, 53, spent the last four years at Louisville and will be the first African-American head coach of a Longhorns men's team. He went 23-3 the last two seasons at Louisville, and was introduced as Texas' new coach Jan. 6.
"We have the right coach on the right terms," Texas President Bill Powers said after the board vote. "I am so excited about coach Strong being here."
Brown spent 16 seasons at Texas and won the 2005 national championship. He resigned in December after four consecutive seasons with at least four losses.
Strong's deal includes Texas paying a $4.38 million buyout from his previous contract with Louisville. Strong's salary and the buyout with Louisville will be paid entirely with money raised by the athletic department, school officials said. No state taxpayer money is used.
Texas has the wealthiest athletic department in the country, with an annual budget of more than $160 million.
Patterson said school officials initially drew up a list of about 30 potential candidates when their coaching search began.
"We whittled that list down a bit and then went out, had about a half a dozen interviews, and Charlie was great to sit with in his kitchen," Patterson said. "Wonderful family, tough football coach ... great in the community. By all accounts, we're just really excited to have him."
Strong's contract has bonus incentives, including $250,000 for winning the national championship and $100,000 for a Big 12 title or winning a national coach of the year award. It also pays at least $25,000 for appearing in a bowl game. Strong also could earn up to $150,000 based on his team's academic performance.
It also has some financial protection for the coach: Texas must pay Strong the balance of his contract if he is fired without cause. Brown's contract ran through 2020 but had a termination buyout that gradually reduced every year.
Now that he's been approved by university regents, Strong is expected to soon announce his staff.