It's not quite official, but here's the report from ESPN:
Walsh only said Monday he will finish the season with Indiana and will not comment on his plans. Pacers team president Larry Bird will take over many of Walsh's duties.
That's not finalized enough to be sure of anything, but things are looking up. More when it comes.
UPDATE: From CNNSI (I'm moving this to the top in expectation of developing news):
UPDATE AGAIN: Not so fast?
The spokesman, David Benner, said that Walsh, who announced on Monday he will leave the Pacers, "hasn't agreed to anything with anybody."
"There's nothing clear about his future and when there is he'll make a statement," Benner said. "He hasn't agreed to anything with anybody."