How to use a 2 TB external hard drive containing existing data as TimeMachine backup storage without losing data already on it?
Time Machine can only work on a volume formatted as HFS+. So you will need to repartition this drive. A quick Google shows that it is possible to resize an NTFS partition, but this can't be done with Disk Utility on MacOS.

I wouldn't recommend playing with the partitioning on the volume if the 500Gb of stuff isn't also backed up somewhere else.