New York, NY (Sports Network) – Donnie Walsh will step down as president of the New York Knicks, the team announced Friday.

A statement from owner James Dolan said Walsh will stay on as a consultant for the 2011-12 season, but leave his current position.

“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 as president, basketball operations of the Knicks at the end of June,” Dolan said.

Walsh became the Knicks’ president in April 2008 after a long tenure with the Indiana Pacers, and changed the club.

He fired head coach Isiah Thomas only a few weeks after becoming president and hired Mike D’Antoni soon after. On November 21, 2008, Walsh traded away guard Jamal Crawford and forward Zach Randolph to help the Knicks have more payroll flexibility for the summer of 2010.

New York took advantage of it by signing forward Amare Stoudemire to a reported five-year, $100 million deal.

Walsh made his biggest move in February, acquiring star forward Carmelo Anthony and point guard Chauncey Billups, among others, from the Denver Nuggets in a blockbuster three-team trade.

The moves paid off with the Knicks’ first winning record (42-40) since 2000-01 and first playoff appearance since 2003-04. New York was swept by Boston in a first-round series.

“In a relatively short time with the Knicks, Donnie made a tremendous impact, which will be felt for many years to come. We thank Donnie for his leadership, hard work and many contributions to the revitalization of the team,” Dolan’s statement said.

The statement said Glen Grunwald, Knicks senior vice president of basketball operations, will serve as interim general manager beginning in July. Dolan added that there is no timetable for finding a new president and general manager.

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New York Knicks president/general manager Donnie Walsh, in the wake of being overruled in the Carmelo Anthony trade, wanted full autonomy in basketball decisions. Knicks owner James Dolan was unwilling to give him that.

So, on Friday, the Knicks announced that Walsh had been relieved of his duties and that Glen Grunwald would serve as interim G.M. The Knicks’ statement says Walsh, whose contract was set to expire at the end of the month, would remain with the team as a consultant.

“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 as president, basketball operations of the Knicks, at the end of June,” Dolan said in a statement. “Donnie will remain with the team as a consultant for the 2011-12 season.

“In a relatively short time with the Knicks, Donnie made a tremendous impact, which will be felt for many years to come. We thank Donnie for his leadership, hard work and many contributions to the revitalization of the team.”

Walsh spent three seasons in New York, leading a massive rebuilding job that got the team back into the playoffs this season following the acquisitions of Amare Stoudemire, Chauncey Billups and Anthony.

Walsh and the Knicks had been negotiating a contract extension, but neither Walsh nor Dolan would compromise on who had final authority over the roster.

Walsh and coach Mike D’Antoni didn’t see eye-to-eye, either. Walsh hired D’Antoni in 2008, but the pairing was an odd mix from the start. Walsh’s best teams have been defense-first, half-court types of teams. D’Antoni runs a wide-open, high-scoring game plan.

D’Antoni’s future with the club is up in the air, too. He is entering the final year of his contract.

Walsh and D’Antoni arrived in New York following the 2007-08 season and immediately went to work cleaning up the mess left by Isiah Thomas, who had served in both roles. For Walsh, that meant spending two seasons reducing one of the league’s highest payrolls, getting the Knicks far enough under the salary cap to afford two top players last summer.

The Knicks got only Stoudemire but traded for Anthony in February and finished 42-40, their first winning record in a decade. They were swept by Boston in their first postseason since 2004, and the roster needs significant upgrades to compete with the top teams in the Eastern Conference.

Walsh had said he wanted to return, but he has battled health problems and didn’t appear to have complete basketball control, with Dolan still relying on the advice of Thomas even after Walsh fired him.

That’s all for today.