HOUSTON -- Jeff Van Gundy took over as coach of the Houston Rockets Wednesday to try to help them end a four-year playoff absence.

Van Gundy, seated between team owner Les Alexander and general manager Carroll Dawson, was formally introduced at the site of Houston's new downtown arena, where the Rockets will play for the first time next season.

The Rockets agreed to give the New York Knicks a second-round draft pick as compensation for Van Gundy, who is under contract with the Knicks through July 31. Van Gundy told the Rockets on Monday he wanted to be their next coach if a suitable contract could be worked out.

The Rockets did not release contract terms but a source within the league told The Associated Press on condition of anonymity that Van Gundy signed a four-year deal worth $18 million. The Rockets agreed to give the Knicks a second-round draft pick as compensation for Van Gundy.

"This to me was a good fit," Van Gundy said. "I just feel that this was right for me at this time in my life."

"I think Jeff will take us really far," Alexander said. "We're thrilled, thrilled, thrilled to have him here."

Van Gundy, who succeeds Rudy Tomjanovich, will have two huge building blocks to begin his new task, 7-foot-6 Yao Ming, runner-up in rookie of the year voting last season, and guard Steve Francis, eager to make the playoffs for the first time in his four-year career.

Rockets players welcomed the news that a coach had been selected, even though many expressed sadness at the departure of Tomjanovich, who led the Rockets to back-to-back championships in 1994 and 1995 and coined the Rockets battle cry "Never underestimate the heart of a champion."

"I am very excited to hear the news about Coach Van Gundy joining the Rockets," Yao said in a statement. "I felt very lucky to play for a Hall of Fame coach last year in Rudy Tomjanovich and I feel lucky to now play for another of the best coaches in the game.

"I am aware of the work that Coach Van Gundy did with Patrick Ewing during the peak of his career, and I think he can bring out the best in me and all of my teammates. I believe Coach Van Gundy can help lead the Rockets to the next level."

The Rockets thought that was going to happen last season with a healthy Maurice Taylor and Glen Rice and the impact of Yao. They won 15 more games than the previous year but still missed the playoffs in the daunting Western Conference.

Tomjanovich missed the final 17 games of the season while undergoing treatment for bladder cancer and eventually stepped down as coach on May 23 after working out a settlement of the final two years of his contract.

Van Gundy wouldn't compare his style with Tomjanovich's.

"There's no sense in comparing; all you want is a team that conducts itself correctly and wins big, and they've done that for a long time with Rudy," Van Gundy said. "I can't tell you how much I've admired him. He's set the standard very high here. I want to make sure that I live up to that and build on what he's done here so well for so long."

Yao, who started for the West in the NBA All-Star Game and led NBA rookies in scoring (15.5), blocks (1.74) and double doubles (27), might get to work with Ewing too.

Ewing has been mentioned as a possible Rockets assistant, although he is under contract with the Washington Wizards.

After formalizing his staff, Van Gundy must prepare for the NBA draft June 26. The Rockets don't have a first-round selection.

Van Gundy replaced Don Nelson as Knicks coach in the 1995-96 season and went 248-172. He led New York to the 1999 NBA Finals, losing to San Antonio. He didn't have a losing season before abruptly stepping down with a 10-9 record early in the 2001-2002 season. He left with a 37-32 playoff record as coach.

Information from The Associated Press was used in this report.