The Knicks, Nuggets and Timberwolves are discussing a three-team trade, according to a report from Chris Broussard.
Carmelo Anthony would be dealt to New York, while Denver would receive Wilson Chandler, Corey Brewer and Minnesota first round pick. The Wolves would receive Eddy Curry's expiring contract and Anthony Randolph.
The proposed deal is not expected to be finished before the beginning of next week at the earliest and sources say it could lead up to the trade deadline.
Should the sides agree on a trade, Anthony would be in line to receive a three-year, $65 million contract extension as part of the agreement in an extend-and-trade.
New York owner James Dolan wants the team to trade for Anthony before the deadline.
"Dolan is really pressuring (Donnie) Walsh to get Melo, but Denver has been vacillating back and forth," one of the sources said.