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NEW YORK -- Donnie Walsh's tenure as president and general manager of the New York Knicks is ending, team owner James Dolan said Friday.
"Following a long series of discussions regarding his future role with the New York Knicks, Donnie Walsh and I have mutually agreed that he will be leaving his position ... at the end of June," Dolan said in a statement.
Walsh will work in a consultant's capacity for the team next season.
The stunning piece of news comes four weeks before Walsh's contract is due to expire, and after several weeks of face-to-face discussions between Walsh and Dolan. The team had imposed a news blackout around the discussions, and neither Walsh nor his agent had commented on his job status since the first round of the playoffs.
Walsh's departure opens questions about whether coach Mike D'Antoni will return for the final year of his contract.
The Knicks had an April 30 deadline to pick up the fourth-year option on Walsh's contract, which he signed in 2008 following the troubled tenure of former team president and coach Isiah Thomas. But that date passed with no action being taken, and Walsh and Dolan were discussing a new contract that would keep him with the team at least through the 2012-13 season. Walsh's desire to have full autonomy was reportedly one of the sticking points.
Thomas has continued to keep in contact with Dolan and was believed by many -- including Walsh, a team source said -- to be influencing the team's personnel decisions.
Walsh gutted the roster over his first two seasons to clear enough salary cap space to sign two maximum-salary free agents. LeBron James was No. 1 on the Knicks' wish list, but they settled for Amare Stoudemire last July and then got their second max player by acquiring Carmelo Anthony from the Denver Nuggets two days before the NBA trade deadline in mid-February.
But the Knicks gave up a lot in the trade -- Raymond Felton, Wilson Chandler, Danilo Galinari, Anthony Randolph, Timofey Mozgov, several draft picks, cash and Eddy Curry's expiring contract -- and there was a school of thought (denied by the Knicks) that Dolan had taken over the negotiations and had undermined Walsh.
The Knicks were swept 4-0 by the Boston Celtics in the first round of the playoffs.
"In a relatively short time with the Knicks, Donnie made a tremendous impact, which will be felt for many years to come," Dolan said. "We thank Donnie for his leadership, hard work and many contributions to the revitalization of the team."
The Knicks said their search for a new president and general manager will begin immediately. Glen Grunwald, the club's senior vice president of basketball operations, will serve as interim GM beginning in July and will oversee all player transactions.
Walsh is scheduled to give a statement at 1:30 p.m. ET.