Steve Mills, pictured, will replace Knicks general manager Glen Grunwald.

Steve Mills, pictured, will replace Knicks general manager Glen Grunwald. Credit: Mayita Mendez

The Knicks shook up their front office Thursday by bringing back former Madison Square Garden president Steve Mills to replace executive vice president and general manager Glen Grunwald.

Mills will be the Knicks' president and general manager. Grunwald will stay with the organization as an adviser, according to a statement released by the team.

"I am pleased to be able to welcome Steve back to the Knicks," Madison Square Garden executive chairman James Dolan said in the statement. "He is a well-respected sports executive with a strong background in basketball, as well as a familiarity with NBA operations and our company. We look forward to his leadership and believe he is the right person to help us reach our ultimate goal of winning an NBA Championship.

"We are grateful for Glen's many years of valuable service and pleased that he will remain with the organization."

Grunwald, who joined the Knicks in 2006 as a senior vice president of basketball operations, helped assemble the team that went 54-28 last season and won its first Atlantic Division title in 19 years.

Among Grunwald's moves with the Knicks were the acquisitions of Tyson Chandler, Steve Novak, Raymond Felton, Pablo Prigioni and Chris Copeland. This offseason, Grunwald traded for Andrea Bargnani, signed free agents Metta World Peace and Beno Udrih and drafted Tim Hardaway Jr.

Grunwald is considered to be more of a basketball personnel guy and talent evaluator than Mills, whose background is business. Mills, 53, could lean on assistant general manager Allan Houston, director of player personnel Mark Warkentien and director of pro scouting and free agency John Gabriel in shaping the Knicks' roster.

"I want to thank Jim for this opportunity to return to the Knicks in this important position," Mills said. "It is an honor and a privilege to work for such a storied franchise and I look forward to doing whatever it takes to make the Knicks a successful franchise and a team that fans can be proud of, both now and in the future."

The Knicks could be in a position to have cap room flexibility in 2015 and may make another run at LeBron James, who has three years left on his contract with the Heat but can opt out of the final two seasons in July.

The Knicks have several important issues facing the team, starting with coach Mike Woodson's contract. Woodson, who played college ball with Grunwald at Indiana, is under contract for this season but has a team option for next season.

Carmelo Anthony can opt out of his contract after the season. J.R. Smith is recovering from knee surgery and has been suspended five games by the NBA for violating the terms of the anti-drug agreement. Amar'e Stoudemire is trying to become a regular contributor again after surgeries on both knees limited him to 29 games last season.

Mills, who is from Roosevelt and went to Friends Academy in Locust Valley, worked for the Garden for a decade until 2009 and hired former Knicks executive and coach Isiah Thomas. Mills became the Garden's president of sports teams operations in 2001 and was later replaced by Scott O'Neil, who left the organization last year.

Mills also spent 16 years working in the NBA office. Most recently, he served as the partner and CEO of Athletes & Entertainers Wealth Management Group and was a candidate to run the NBA players union.

Grunwald replaced Donnie Walsh as interim general manager July 1, 2011, and was promoted to executive vice president and general manager on April 24, 2012. Before that, Grunwald served seven years as the Toronto Raptors general manager. Grunwald finished tied for third in the NBA Executive of the Year voting last season.

The Dolan family owns controlling interests in the Knicks, Madison Square

Garden and Cablevision. Cablevision owns Newsday.