Malone's agent informed U.S. team officials Monday night of the decision. He will retain his spot on the 2004 Olympic team if the United States earns one of three berths to the Athens Games at a qualifying tournament that begins Wednesday.
"It was more important for him to be with his family and we all understand that," U.S. coach Larry Brown said. "Hopefully he'll be part of our team in 2004 if we're lucky enough to qualify."
Malone, a 40-year-old two-time Olympian, left the team's training camp in New York on Aug. 13 to return to Arkansas after his mother, Shirley Jackson Malone, died.
Martin was expected to join the team at its afternoon practice Tuesday in San Juan. Martin, who got married Saturday in Las Vegas, is not guaranteed a spot on the 2004 team, USA Basketball spokesman Craig Miller said.
He becomes the third member of the New Jersey Nets on the roster, joining Jason Kidd and Richard Jefferson.
"This is somewhat unexpected, but it is a great opportunity for Kenyon. He's certainly deserving of this kind of honor and we're looking forward to having him join the team," Brown said.
The U.S. team plays its first game Wednesday night against Brazil.
The 6-foot-9 Martin, a three-year NBA veteran, gives the American team another natural power forward along the front line. The U.S. team is using Tim Duncan and Jermaine O'Neal, who play power forward on their NBA teams, as centers. Elton Brand is the other big forward.
Martin was a member of the 2001 Goodwill Games team that went 5-0 in Australia, needing overtime to defeat Brazil.
"This is a great opportunity. I'm very pleased to be added to the team," Martin said in a statement. "I already have a couple of my teammates on the team so we should have a lot of fun."
The first overall pick of the 2000 draft, Martin averaged 16.7 points and 8.3 rebounds last season for the Nets, who went to the NBA Finals for the second consecutive year.
Martin, who shot just 3-for-23 in the deciding Game 6 of the finals against San Antonio, reportedly asked for a trade earlier this summer when the Nets did not meet his agent's demand for a maximum contract extension.
He was selected to the U.S. team by a subcommittee that included Stu Jackson, an NBA vice president and chairman of the USA Basketball selection committee.
"Under these circumstances, because of the time issue, they have the authority to select someone else," Miller said.
This story is from ESPN.com's automated news wire. Wire index