Phil Jackson signed on to become president of the New York Knicks after a lunch meeting with team officials Friday, sources have told ESPN.

Serving as Knicks president could prove to be the most challenging job of Phil Jackson's stellar career. Jim McIsaac/Getty Images

Todd Musburger, Jackson's Chicago-based agent, was in Los Angeles to finalize the contract with Jackson and Knicks officials, according to sources. Jackson's deal is for five years and is expected to pay him $12 million annually but does not include an ownership stake, sources said.

The Knicks released a statement earlier Friday saying a "major announcement" would be made Tuesday at 11 a.m. ET at Madison Square Garden.

Jackson, who has won a record 11 NBA championships as coach of the Los Angeles Lakers and Chicago Bulls and two as a Knicks player, probably will spend significant time in New York but also retain some time in Los Angeles, sources said.

Jackson will take over the running of the Knicks' basketball operations department from president and general manager Steve Mills. A source said earlier this week that Mills will remain an integral part of the organization.

Jackson's discussion with the Knicks has been ongoing for several months, sources said.

During that time, the Buss family has had several meetings in which Jackson was discussed, sources said.

While there was significant interest in bringing him back to the Lakers in some capacity, it never reached a level where Jackson's representatives were formally contacted, as it was clear to all involved the Lakers would not offer a role that encompassed nearly as much power as the Knicks did, sources said.

As public pressure on the Buss family mounted this week, their position remained unchanged. No contact was made with Jackson's representatives, sources said.

Jeanie Buss, Jackson's fiancee, will remain the Lakers' executive vice president of business operations, a source said. Buss is expected to attend the Lakers' next home game, Wednesday against the San Antonio Spurs.

New York (26-40), meanwhile, has won five straight games and is 3½ games behind eighth-place Atlanta for the eighth and final Eastern Conference playoff spot.

But Jackson is taking over a Knicks team that has overall performed well below expectations this season.

Jackson will be faced with several tough decisions in his first offseason as president, one of which is what to do with free agent-to-be Carmelo Anthony.

Anthony, who plans to opt out of the final year of his contract this summer, can sign a deal with the Knicks that is one year longer and worth $33 million more than any pact he can sign with another team.

The star forward has said his first priority is to re-sign with the Knicks. But he'd like to sit down with Jackson and discuss the team's plans for the future before making a decision.

Jackson probably will also have to hire a coach in the offseason. There's widespread speculation that Mike Woodson, the Knicks' current coach, is expected to be let go at the end of the season.

Jackson disciples such as Steve Kerr, Brian Shaw and Kurt Rambis are considered potential candidates.