NEW YORK -- Donnie Walsh is taking over the New York Knicks, and he's doing so on his terms.
An NBA source told ESPN.com on Wednesday that the Knicks yielded to Walsh's wishes on several key terms regarding authority and autonomy in reaching agreement on a four-year deal that installs Walsh as the new team president.
Walsh confirmed his power at a Wednesday news conference.
"He's more or less left this up to me," Walsh said of owner James Dolan.
The Knicks introduced Walsh Wednesday, and he said he will wait a few days before deciding on coach and now-former president Isiah Thomas' future with the organization.
Thomas is with the team in Memphis, where the Knicks continue a five-game road trip Wednesday night. Walsh said he won't make any decisions until after he speaks with Thomas.
"I need to sit down with Isiah and have a meaningful basketball conversation," Walsh said.
Thomas was asked if he felt he would need to save his job when they do meet.
"If that's necessary, you know I think with any new boss you have to sell your program," Thomas said. "There'd be some things that hopefully he'll like and I'm sure there will be some things he wants to change."
Walsh hired Thomas to coach the Indiana Pacers in 2000 and said Wednesday that Thomas "has a great basketball mind." Walsh also said he needs to talk to players like Stephon Marbury and Eddy Curry before deciding what futures they could have with the team.
"Whatever I can do to make the Knicks better, that's what I'll do," Thomas said.
Walsh will report directly to Dolan, rather than to Madison Square Garden president Steve Mills as was the arrangement under previous Knicks administrations.
"His mandate is clear -- do whatever is necessary to turn this team around," said Dolan, who also is chairman of Madison Square Garden.
New York hasn't won a playoff game under Thomas, its president since December 2003. He became coach in June 2006. Walsh said he believes Thomas still can help the Knicks.
Walsh also will have the authority to establish a new media policy, one that presumably will allow him -- and the Knicks' players -- to have full freedom of speech. The Knicks currently don't allow individual interviews with players or staff unless a public relations official is present, and Walsh is known to be friendly with the media.
"I think access is a big part of most franchises," Walsh said
But Walsh, a New York native, said he is not returning home to be a savior.
"I'm not the great new hope. I'm just a guy who's going to come in and try to create a team." Walsh said. "And it's not going to happen overnight, so I don't want any illusions. But I think it has to get better right away.
"I think the people in this city that are paying money to go to games, they've got to see a competitive team. They've got to see a team and I think they have to see a team that makes sense that they can say, 'OK, this could get better.' There has to be a direction, which I think is difficult to do."
Still, there are high hopes that Walsh can turn around a franchise that hasn't won a playoff game since 2001. He isn't sure if he will bring in someone to serve as his general manager.
"In Donnie, the Knicks have secured the services of a seasoned basketball professional who is held in high regard throughout the league and to whom I have often turned for input on basketball matters over the years," commissioner David Stern said in a statement.
"Donnie, in turn, is joining one of our storied franchises, whose team and arena are rich in NBA tradition, and he gets to return to his hometown and a metropolitan area that many of his family members call home."
Less clear is the future of Thomas, who was with the team in Memphis on Wednesday morning after New York (now 20-54 with eight games left and possibly headed for the first 60-loss season in franchise history) lost in overtime at Milwaukee on Tuesday night.
Walsh's hiring means Thomas has been stripped of his team presidency, and the question of how -- or if -- the Knicks plan to part ways with Thomas entirely will be the first test of Walsh's leadership.
Sources told ESPN's Stephen A. Smith that Walsh is expected to retain Thomas for the time being. Thomas signed a long-term contract extension 13 months ago, and it is possible Dolan wants to keep him aboard in some capacity.
Walsh's contract is worth about $20 million over four years, although the final year is not fully guaranteed, a source close to the Knicks told ESPN.com.
Word of Walsh's hiring came a few hours after the Knicks' loss to the Bucks, but Thomas was asked following the game whether he would have any regrets if his tenure as coach came to an end.
"No, I look back, and I look at what we started with and where we're going, and I think we have a very bright future," Thomas said.
Walsh announced March 24 that he was leaving the Pacers after 24 years with the organization. He joined the Pacers' front office as general manager in 1986, and became team president in 1988 and CEO in 2003. He helped the franchise rise from NBA laughingstock to title contender.
"One of the highest things on my list is Donnie's happiness," Pacers co-owner Herb Simon said. "If that is what he wants, I'm very happy for him. He has given us 24 years of incredible service. I think he'll do a great job."
Indiana reached the Eastern Conference finals six times and won the Central Division four times during Walsh's stay as an executive. The Pacers reached the NBA Finals in 2000, losing to the Los Angeles Lakers, and had the league's best record in 2004.
"I've often, when I needed some basketball advice, he's on a short list of people that I pick up the phone and call around the league for just basketball matters," commissioner Stern said last week. "And he works and works and works."
Walsh had had a lesser role in recent years since the Pacers hired Larry Bird as their president in 2003. Previously, Walsh had said he wouldn't reveal any plans about his future until after the season.
Reports surfaced in late March that Dolan had preliminary talks with Walsh. Negotiations moved quickly, with the Knicks interviewing apparently only him.
The Knicks and Pacers once had a fierce rivalry, meeting in the Eastern Conference finals in 1994, 1999 and 2000. Walsh remembers what Madison Square Garden was like back then, and wants it to be that way again.
"That's it. That was it. That is it. That's where I want to go to, get that back," he said. "That's what I'd like."
Chris Sheridan covers the NBA for ESPN.com. Information from The Associated Press was used in this report.