The Knicks and Walters worked out the contractual language, a source said, and Stoudemire finalized the deal in an afternoon meeting with Knicks owner Jim Dolan.
"All done," Walters said in a text message.
Stoudemire is the first of the major free agents to switch teams. He can't officially sign the contract until Thursday.
Stoudemire emerged from the meeting with Dolan and Garden officials, and met an assemblage of media with a Knicks cap and bold declaration: "The Knicks are back," he said.
Prior to committing to play for the Knicks, Stoudemire called Denver Nuggets forward Carmelo Anthony to tell him he was close to signing, a league source said. While Anthony doesn’t seem to be in a rush to finalize his three-year, $65 million contract extension with the Nuggets, he is expected to sign it at some point this offseason.
Anthony recently told Yahoo! Sports he'll stay with the Nuggets if he thinks the team can win. He also admitted that passing on the team's extension offer would be a risk because terms of a new collective bargaining agreement figure to be less favorable for players.
Stoudemire had a whirlwind weekend in New York City, attending a Broadway play, a Yankees game and a Fourth of July party at Dolan’s estate in the Hamptons.
As Yahoo! Sports first reported, Stoudemire closed on a contract with the Knicks after rejecting a final offer from the Phoenix Suns on Friday. After Stoudemire's rejection, the Suns reached agreement with forward Hakim Warrick(notes) on a four-year, $18 million contract.
The Suns moved forward with Warrick after negotiations with Stoudemire stalled. Walters had a late-night conversation Thursday with Suns owner Robert Sarver, who insisted he couldn’t wait any longer on Stoudemire’s decision and would need to consider other options. Stoudemire was not ready to commit, sources said, because he wanted to see how the rest of the free-agent market played out and he believed he could get a better offer from the Knicks.
The Suns' last-ditch proposal to Stoudemire was a five-year offer that guaranteed him $71 million, sources said. The first three seasons were fully guaranteed. The fourth season contained a 50 percent guarantee that could become fully guaranteed based on the number of minutes Stoudemire played in the first three seasons. The fifth season of the contract also could become guaranteed based on a minutes incentive.
The Suns put in the incentives because of concerns over Stoudemire’s past knee and eye injuries. Insurance won’t cover Stoudemire’s salary if he can’t play because of any additional problems to either of his knees or his right eye.
The Suns knew the Knicks were prepared to give Stoudemire a maximum offer with all five seasons guaranteed and weren’t prepared to go that high. The Heat expressed similar concern about Stoudemire’s previous injuries, and have been more focused on trying to land Chris Bosh(notes). The Houston Rockets tried to deal for Stoudemire in February and also explored possible sign-and-trade scenarios with him in free agency.
Stoudemire had played all eight seasons of his NBA career with the Suns after they took him with the ninth pick in the 2002 draft.
Yahoo! Sports NBA reporter Marc J. Spears contributed to this report.