Bird, 55, met with team owner Herb Simon before making the announcement.

He cited health issues as one of the reasons for his departure.

"My back hasn't been that great this year, and I have a shoulder to get an MRI on. I'm sure it needs surgery," Bird said. "Sometimes you can be in one place too long. I don't think this should be too much of a surprise. Me and Herb have been talking about this for a couple of years."

But Bird said he's confident the Pacers are headed down the right path.

"We had to fight through some tough years here. The company as a whole stuck together," he said. "We finally got this going in the right direction."

Simon told reporters that Bird could have stayed with the Pacers as long as he wanted.

"I feel sad making the announcement that Larry's going to be leaving us," Simon said. "The Pacers appreciate everything he's done for us … and hope that we can be associated with him in the coming years."

The team will bring back Donnie Walsh to work with Kevin Pritchard to lead the team. Walsh will be president and Pritchard will be general manager.

"I'm really excited to be back with the Pacers. I didn't really expect to be, but I am," Walsh said.

"Today's a great day for me," Pritchard said. "For an Indiana boy growing up here going to Pacers game when I was young, sitting in this seat is quite an honor."

Bird, an Indiana native, is a basketball legend in Indiana, having played in the NCAA Tournament championship game for Indiana State in the 1970s.

He went on to a 13-year career for the Boston Celtics in the NBA, finishing as one of the league's all-time best players, a three-time MVP.

Bird coached the Pacers for three seasons in the late 1990s, winning the league's coach of the year honors in his first season. He became the team's president in 2003.

Before Indiana's resurgence this season, Bird's leadership had been questioned as the Pacers fell into disarray.

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