In the latest twist of his expected departure from the Dallas Mavericks, Tyson Chandler is closing in on a deal with the New York Knicks, according to sources close to the process.

"New York is Tyson's first choice," one source told ESPN.com, confirming a Thursday report from CBSSports.com that the Knicks have jumped ahead of the Golden State Warriors in the race to sign Chandler.

"It's 98 percent sure that Tyson is going to wind up with the Knicks."

To create sufficient salary-cap space to sign Chandler, New York is expected to shed the contracts of Chauncey Billups and Ronny Turiaf, through either trades or the forthcoming amnesty clause.

Signing Chandler, sources said, could free up the Knicks to offer star forward Amare Stoudemire to the New Orleans Hornets in a trade scenario for Chris Paul, who badly wants to reunite with Chandler after their time together with the Hornets. Sources say that's one option New York is considering.

CSNBayArea.com reported that the Warriors are trying to sweeten a four-year offer to Chandler valued at $60 million to outbid the Knicks.

The Warriors, sources said, have made Chandler their No. 1 roster target, no matter what happens with their recent trade talks with the Hornets about Paul.

The Mavericks, meanwhile, are fully operating under the premise that Chandler is gone.

Another telling sign that Chandler's time in Dallas has come to an end emerged Thursday, when sources close to the situation told ESPN.com that the Mavericks offered Chandler to the Orlando Magic as part of a proposed sign-and-trade deal for All-Star center Dwight Howard.

No one connected to the Mavericks has said outright that Chandler's time in Dallas is over. But it's now the working assumption in Dallas that Chandler will definitely be leaving the Mavericks -- despite being credited with changing the defensive culture of a team that lost in the first round of the playoffs three times in the previous four years before its 2010-11 championship breakthrough.

Negotiations between the Mavericks and Chandler are essentially frozen, sources said. And any hope of a U-turn has all but evaporated because Dallas is determined to take as much salary-cap space as possible into the summer of 2012, even if that means parting with such an important piece of the first championship in franchise history.

Two sources briefed on the matter used the same words to describe the situation when asked about Chandler by ESPN.com: "He's not coming back."

The Mavericks have taken such a firm negotiating stance with Chandler because they fear that matching the offers for the 29-year-old will not only take them out of the race for 2012 free-agent stars Howard, Deron Williams and Chris Paul, but also prevent them from having the down-the-road financial flexibility to find a younger cornerstone player to team with Dirk Nowitzki as the 33-year-old face of the franchise gets older.