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.

The highly respected Walsh came to his hometown team after spending 24 years with the Indiana Pacers. He joined their front office as general manager in 1986, became team president in 1988 and CEO in 2003, turning the franchise into a perennial Eastern Conference contender that reached the NBA finals in 2000.

He brought professionalism to a Knicks organization that had become an embarrassment on and off the court during Thomas’ reign, unloading some of the burdensome contracts that hindered them for years and relaxing the team’s media policies.

His draft record in New York was underwhelming — high lottery picks Gallinari and Jordan Hill are already gone — but Walsh always said his focus was free agency, believing that was the quickest way to rebuild a team.

He refused throughout the season to talk about his future, including reports he was angered that Dolan got involved in the pursuit of Anthony. But his wife and much of his family had remained in Indiana after Walsh came to New York, so he had reason to leave if he wasn’t happy with a new contract offer.

Walsh is scheduled to give a statement at 1:30 p.m. ET.

Chris Sheridan covers the NBA for ESPN.com. Information from The Associated Press was used in this report.

Follow Chris Sheridan on Twitter: @csheridanespn

Read More: Jeff Teague (G – Wake Forest)

He fits their style. He has the assets. And, on the surface, he fits the need. But a closer look at Josh Selby possibly heading to the New York Knicks with the No. 17 overall selection in the 2011 NBA Draft just doesn’t make sense when it comes down to it. And while Chad Ford has a decent guess for both slot and value, the Knicks will likely look elsewhere when the time comes.

Ford, in his most recent mock draft, has Selby slipping to the mid-teens before getting picked by the Knicks. He’s a solid fit in head coach Mike D’Antoni’s system and that’s also around the time that a disappointment in college like Selby might start to go on multiple draft boards around the league. Yet Ford also insists that the Knicks’ point guard need should be the primary argument here. He writes:

GM Donnie Walsh may have made the biggest mistake of his career when he passed on a number of terrific young but unproven point guards in 2009 so he could draft Jordan Hill. Brandon Jennings, Ty Lawson and Jrue Holiday — and even Darren Collison, Eric Maynor and Jeff Teague — all appear to be on their way to a long NBA career. Don’t expect the Knicks to make the same mistake again.

They’ve been looking long and hard at Selby for a while, thinking he’d thrive in Mike D’Antoni’s system, which allows guards much more freedom than they get at Kansas. Selby has lottery talent but a shaky résumé. It may be a risk taking him this high, but he has a very high upside.

A closer look at the Knicks roster, however, doesn’t reveal the hole that Ford insists is there. After the trade that brought Carmelo Anthony over, starting PG Chauncey Billups became the underrated aspect of the trade that provided the incredible value to the Knicks. Even after losing Ray Felton, the Knicks still had a strong point to run D’Antoni’s system — one who has incredible post-season success and experience instead.

Naysayers will point to Billups’ age (34) and recent surgery as signs that the Knicks need to think ahead, but Billups was run into the ground last year for the Denver Nuggets and a veteran player’s legs simply can’t take the 82-game regular season grind and maintain the strong play throughout. Instead of looking to replace BIllups, they should look for ways to maximize his impact and manage his minutes. There’s still enough there to have him as your starter for another season or two.

The same could be said of the back-up guards already in place. Toney Douglas had a fine rookie season and can definitely get his shot off while not embarrassing the team on defense either (we are talking about the Knicks here). At the same time, Anthony Carter might be 35-years-old, but he’s still a lockdown defender at the point.

Both Douglas and Billups had off-season surgery, so that might scare the Knicks enough to add another piece at the position. But Douglas is only 24 and just finding his own game at the NBA level and both players are still expected to be fully recovered and ready for the beginning of training camp.

The Knicks don’t need to feel pigeonholed into a point guard’s corner despite popular opinion. If Selby is the best player available, that’s another argument entirely, but if it’s about having to fill a perceived need, the Knicks shouldn’t feel any pressure whatsoever.