NBA Commissioner David Stern, Deputy Commissioner Adam Silver and New York Mayor Michael Bloomberg made the official announcement at a news conference Wednesday.
The league has been working with the Knicks and Nets for months on the plan to split the events.
The league last split sites for its midseason showcase in 2010, when the Saturday events were in the Dallas Mavericks' arena and the game was held at the Cowboys' stadium.
The NBA All-Star game was last played at Madison Square Garden in 1998.
