Sources close to the talks told ESPN.com's Marc Stein that the Dallas Mavericks expect Chandler's exit to ultimately take the form of a sign-and-trade in which Dallas will take back a low-salaried player to be determined from the Knicks. Doing so will create a sizable trade exception that the Mavericks can use to faciliate future deals.
The Knicks scheduled a news conference for after practice Saturday to discuss Chandler.
The 7-foot-1 Chandler, who served as the best defensive backbone Dallas has had in the Dirk Nowitzki era, realized almost immediately in the negotiation process that he wouldn't be able to work out a deal to return to the Mavericks.
"It just really happened over the last, like, 48 hours," Chandler said on ESPN 103.3's "Ben and Skin Show" on Friday. "I just think the future of the team, being able to play alongside Amare Stoudemire, Carmelo Anthony and the young talent that we have, I feel like puts us in contention over the next four or five years."
Anthony, for his part, was excited by Chandler's addition.
"It'll beef up our frontcourt," Anthony said. "Tyson brings a lot of energy and a lot of enthusiasm to the basketball in court, and I think he will do the same thing that he did in Dallas here in New York. We got what everybody wanted what New York to get, which was a big man. Tyson has established himself as a dominant force on the defensive end.
"He showed that on the biggest stage in sports, winning a championship."
Dallas owner Mark Cuban, who is determined to maintain financial flexibility under the new, more restrictive collective bargaining agreement, offered only a two-year deal. The New York Times reported that Chandler's deal with the Knicks is expected to be in the range of $58 million for four seasons.
"In this situation, signing back with the Mavs, it just didn't make business sense," said Chandler, who averaged 10.1 points and 9.4 rebounds and finished third in Defensive Player of the Year voting. "Business is business. Sometimes we get upset by it, but in this business, we can't take it personal.
"I just honestly thank the Mavericks for even bringing me [to Dallas] and giving me the opportunity to do what we did last year. I have absolutely no animosity towards the organization or anybody involved with the organization. I will always love the organization. I will always love the fans there and everybody that has anything to do with Dallas, because that won me my first championship. We had an incredible year last year, and that will always be in my heart."
The Knicks might have to make some business decisions of their own to make cap room for Chandler. Multiple reports say that Chauncey Billups could be waived under the amnesty clause in the new CBA. Also, sources told ESPN The Magazine's Ric Bucher that the team is offering forward Ronny Turiaf and $3 million to teams with cap space to clear payroll. The Knicks were finalizing a deal Friday night to send Turiaf to the Wizards, the New York Post reported, citing a source.
Even so, it didn't take long for Knicks coach Mike D'Antoni to put the signing in perspective.
"He brings everything that we didn't have," D'Antoni said. "... We got a lot better, real quick."
Stoudemire believes Chandler put the Knicks on the right track.
"We were looking for a center and Tyson Chandler's a perfect fit for us," Stoudemire said. "It's something we talked about doing when I first signed here ... looking to build a championship-caliber team."
The challenge for the Mavericks in adding depth to their center rotation is getting quality players to take short-term deals to preserve maximum cap space for their summer of 2012 recruiting plans. The Mavericks did try to convince Chandler to accept a one-year deal worth a whopping $20 million, but there was never real hope of that happening, sources said.
As far back as last week, as negotiations with the Mavericks quickly stalled, Chandler told ESPN.com in a phone interview: "I really think I'm going to be on a new team come training camp."
Chandler maintains that staying in Dallas has always been his first choice, but he expressed disappointment last week that communication between the sides was minimal from the end of the NBA Finals in mid-June and the June 30 deadline for a contract extension.
The Mavericks maintain that they were reluctant to talk about an extension before July 1 because no one knew how drastic changes to the NBA's collective bargaining agreement would be at that time.
The best estimates in circulation suggest that the Mavericks would only have roughly $5 million in cap space for the summer of 2012 if they match an offer for Chandler, even if J.J. Barea is let go as expected. Fellow free agent Caron Butler already accepted a three-year, $24 million deal from the Clippers on Thursday.
To have the needed cap space to bid for a player of Chris Paul's or Deron Williams' caliber if Chandler is retained, Dallas would likely need to set free either backup center Brendan Haywood or forward Shawn Marion through the amnesty clause, bid farewell to 2012 free agent-to-be Jason Terry and perhaps even be forced to send away younger prospects like Corey Brewer or Rodrigue Beaubois in trades that bring back no salary.
Chandler, 29, was acquired by the Mavericks in July 2010 in a deal sending Erick Dampier to the Charlotte Bobcats. But Chandler was widely billed at the time as a consolation prize, after Dampier's cap-friendly contract failed to get Dallas in the bidding for the league's marquee free agents -- LeBron James, Dwyane Wade and Chris Bosh among them -- through various sign-and-trade offers.
Yet, Chandler wound up meshing with Nowitzki better than anyone anticipated, supplying a blend of length, athleticism, rim protection and vocal leadership that no big man who previously lined up alongside the eventual NBA Finals MVP had ever provided in Dallas.
"The most difficult thing is having to make those phone calls to Dirk and (Jason) Kidd and Jet and all the guys that I played with," Chandler said. "When I say this, I say it from the heart: I truly love those guys and I will forever, because we stood side by side and accomplished the ultimate."
Tim MacMahon covers the Mavericks for ESPNDallas.com. ESPN.com's Marc Stein and ESPNNewYork.com's Ian Begley and Jared Zwerling contributed to this report.