According to Larry Lage, Michigan State athletic director Mark Hollis told the Associated Press that the Cleveland Cavaliers are interested in Tom Izzo, but no offer has been made (not yet, anyway).
This confirms the last update on this story and debunks The News-Herald's report that Izzo was already offered the head coaching job of the Cavaliers. While I don't doubt that an offer could be coming his way sometime soon, it doesn't appear the process is at that point right now.