"He didn't resign," one source close to him said. "Mutual decision."
Yahoo! Sports first reported D'Antoni's exit.
Sources say assistant coach Mike Woodson will take over on an interim basis for the Knicks, while assistants Phil Weber and Dan D'Antoni, Mike's brother, are no longer part of the staff.
The Knicks, who brought on D'Antoni in May 2008 after firing controversial coach, Isiah Thomas, went 121-167 in his three-plus seasons at the helm.
The Knicks were the feel-good story of the NBA less than a month ago, when the Jeremy Lin craze went global and New York won seven straight games to return to .500 (15-15) and look every bit like a playoff team. But then came Carmelo Anthony's return from injury, and the eight losses in the next 10 games that followed thereafter clearly spelled doom for D'Antoni.
An ESPN.com report published Tuesday night claimed D'Antoni had lost his locker room, as an anonymous source was quoted saying "he doesn't have the respect of the team anymore." The report said it's unlikely D'Antoni would return as coach next season -- if he survived this season at all.
While retired Lakers and Bulls coach Phil Jackson has frequently been named as a possible successor to D'Antoni, sources close to retired Utah coach Jerry Sloan say he would be interested in the position.
Sloan retired abruptly in February 2011, and was pursued by a number of teams during the summer before resisting the recruiting efforts. In an interview with SI.com in early January, he said he was considering a return.
Kentucky coach John Calipari has also been mentioned as a possible candidate, but he quickly refuted the notion of a return to the NBA on his Twitter account.
"As I've said before, I have the greatest job in basketball at any level," he wrote. "Why would I be interested in another job? I love being the coach of the commonwealth's team. To the [Big Blue Nation] and all the recruits that are coming or want to come, I will be at Kentucky."
Calipari, who is represented by CAA, the same agency as Carmelo Anthony and Knicks executive Mark Warkentien, was the Nets coach from 1996 to 1998 and went a combined 72-112.