The Magic turned to Van Gundy after releasing University of Florida Coach Billy Donovan from an agreed-to five-year, $25 million contract. Terms of Van Gundy's deal with Orlando weren't released.
"Stan enjoyed tremendous success during his tenure with the Heat," Magic General Manager Otis Smith said. "He has a great basketball mind, tremendous respect around the league and will get the most out of our players. Stan was sought-after by many teams this summer and we feel very proud to welcome him to the Magic family."
Van Gundy was coach of the Miami Heat from 2003-05 and led the Heat to 112-73 regular-season and 17-11 playoff marks. Pat Riley reclaimed the head coaching position on Dec. 12, 2005.Van Gundy had been with the Heat for 12 seasons as an assistant or head coach.
The Magic had been without a head coach since May 23, when Brian Hill was fired after two consecutive losing seasons.