UPDATE 6:30 PM: We’ve just received word that negotiations have concluded, marking That ’70s Show co-star Ashton Kutcher’s return to television after a brief movie career. He is replacing Charlie Sheen in Two And A Half Men. The deal made sense for series producer Warner Bros which already had an overall with Kutcher’s Katalyst production banner. In fact, an hour later, Ashton announced he was joining the show by tweeting to his 6.7 million Twitter followers: “What’s the square root of 6.25?”

Names like Woody Harrelson, Rob Lowe, John Stamos, and Jeremy Piven circulated in the blogosphere as possible replcements. But until this week, with Deadline’s scoop that the show was in final negotiations with Hugh Grant, there had been nothing concrete going on with any specific actor. Co-creator and executive producer Chuck Lorre only wanted to continue the show “if he can find the right actor and get excited about that,” sources told Deadline. What mattered most to Lorre was that Sheen’s replacement be “somebody Chuck can work with” after butting heads with Charlie for years in a situation that escalated into a very public and nasty feud this spring.

All along insiders at Warner Bros and CBS had been saying that they were going after “an A-lister” as the new star of the top-rated sitcom after Sheen was fired. The feeling was to contract with “an exciting actor who’d never done TV before,” and CBS chief Leslie Moonves especially was encouraging Lorre et al to “swing high”. As one insider told Deadline, “Everybody wants show back and to support Chuck creatively and to do something the advertising community will feel good about. The only issue was whether everyone could get the show up and running and right fast enough to make this fall’s schedule.”

Because Kutcher is both a producer as well as an actor, he has a good reputation as a responsible showbiz professional. Sure, the producers’ top choice, Hugh Grant, would have been a swing for the fences — a real coup that could have bought the aging comedy series another 3 or 4 seasons on the air. By contrast, Ashton, whose movie career went from warm to ice cold in just a few years, is a solid base hit.

PREVIOUS 4 PM: CBS’ Leslie Moonves is loving this media frenzy over Charlie Sheen’s potential replacement on Two and a Half Men. The latest name to enter the rumor mill, that of Ashton Kutcher today, is noteworthy. Like Grant, he has big screen rom-com credentials which could help attract women to watch the show. But he also has multicamera sitcom experience from That ’70s Show that would come in handy. And last but not least, he has 6.7 million Twitter followers. That’s more than the audience for the Two and a Half Men repeat this past Monday.

Oh, but what could have been. The idea of Hugh Grant becoming an American small screen star was first pitched to CBS boss Les Moonves and CBS entertainment president Nina Tassler about a month ago, according to Deadline’s sources. After a couple of weeks sorting out the Sheen lawsuit fallout, the two execs blessed the plan and Grant was approached by the producers at Warner Bros. Deadline heard that Hugh flew in and had 2 creative meetings. Things were progressing and he had all but a completely negotiated deal on the table. But then he backed out unexpectedly. ‘It was not the money. He didn’t want to do TV because those 24 episodes are a grind and a lot of work. At the end he couldn’t get his head around doing a series.”

CBS has been working hard to announce the return of the show and its new star at next week’s upfronts. Because it’s a decision that will affect not just CBS’ Nielsen ratings and advertising revenue but also billions of dollars of future syndication contracts for Warner Bros Television. At first, executive producer and co-creator Chuck Lorre wasn’t sure if he wanted to proceed with the show after Sheen’s implosion. With three successful sitcoms on CBS — Two And A Half Men, Mike & Molly, and The Big Bang Theory — Lorre was enjoying only showrunning two of them.

But the problem, and it’s a very nice problem to have, is that there is so much moolah at stake because Two And A Half Men is a multibillion-dollar asset in syndication on terrestrial broadcast stations like the Fox station group, on cable with FX, as well as via multi foreign and DVD deals. The terrestrial contracts called for the stations to have to carry the show as long as Sheen was “of the essence” of each episode. Once Sheen left, the stations could get out of the contract. The hope was and still is that his replacement will be so compelling that the stations will want to continue the contract. Not so with the cable and foreign deals, where Charlie was not “of the essence”, meaning it didn’t matter to the contracts whether Sheen was in the show or not as long as the sitcom’s concept remained similar.