"A comprehensive agreement was made this afternoon between the New York Knicks and Stephon Marbury," the Knicks said in a statement. "Under its terms, the grievance has been resolved and the Knicks have requested waivers on Stephon. No additional terms will be disclosed."
Marbury is now eligible to play in the playoffs for another team because his release from New York comes before the league's Sunday deadline.
The New York Times first reported on its Web site Tuesday afternoon that "all indications were that the two sides had reached agreement on a contract buyout that will free [Marbury] to join another franchise for the stretch run."
The league sent out a notice Wednesday to all teams informing them that Marbury had been placed on waivers by the Knicks and will clear waivers Friday at 10 a.m.
Regarding the likelihood of Marbury signing with Boston as early as Friday, one source close to the process told ESPN.com: "That's what [the Celtics] hope. Marbury has expressed interest in them and they have expressed interest in him."
With Marbury expected to sign for a prorated share of the league's veteran minimum, Boston's financial risk is minimal if the experiment doesn't work and the Celtics decided to subsequently cut Marbury.
Another source indicated that Marbury and the Celtics have already commenced discussions on a contract. The Knicks had long ago given Marbury clearance to speak with other teams about a new job after it became apparent as early as opening night that he would not be playing again for his hometown team.
"The Celtics are focused on defending our championship and are working day and night to finalize our playoff roster," owner Wyc Grousbeck said. "We don't have anything to announce at this point except that we intend to do everything we can to raise Banner 18."
It's believed that Marbury will be forfeiting in excess of $2 million from his $20.8 million salary this season, which would net the Knicks twice that much because of the luxury-tax savings involved.
Marbury would then be in position to recoup roughly half of what he's surrendering in his buyout from the Celtics. As ESPN.com reported Jan. 1, Boston has been hoping to sign the wayward point guard to bolster its thin bench if Marbury -- who turned 32 last week -- could manage to extricate himself from the Knicks.
Marbury hasn't played in an NBA regular-season game since Jan. 11 of last season, but the Celtics have been concerned about their depth all season after the offseason departures of James Posey and P.J. Brown. Boston has since lost star forward Kevin Garnett to a knee injury for the next two to three weeks and reserve swingman Tony Allen to a thumb injury expected to sideline him for eight weeks.
Earlier Tuesday, Boston signed center Mikki Moore, who was waived by Sacramento after last Thursday's trading deadline. The Celtics opened two roster spots last week by trading away veteran guard Sam Cassell and little-used center Patrick O'Bryant.
Last week, ESPN's Stephen A. Smith reported that multiple Celtics players had recently reached out to Marbury, urging him to forfeit some salary in his long-contentious negotiations with the Knicks to prove to skeptics that he could make an impact with a championship-caliber team.
Other contending teams such as Dallas and Miami are expected to at least inquire about Marbury's availability, but the widespread belief among NBA executives is that Marbury is Boston-bound. Had the buyout talks stretched past March 1, Marbury would not be eligible to appear in the playoffs for any other team.
"It sounds like it's pretty much locked and loaded," one rival team official said Tuesday of Marbury joining the Celtics and reuniting with his former Minnesota teammate Garnett.
A league source told ESPN that settlement negotiations commenced during a lunch break at Marbury's grievance hearing. Within an hour, an agreement had been reached, and the remainder of the grievance hearing was canceled, according to the source. The hearing stemmed from a grievance Marbury filed in an attempt to regain more than $400,000 in docked salary from the Knicks.
Buyout talks had been stalled for some three months since Marbury stormed out of a Dec. 1 negotiating session after just 15 minutes.
Participants in Tuesday's hearing -- the first face-to-face talks between the sides since the early December meeting -- included Marbury and NBA Players Association lawyer Hal Biagas as well Knicks president Donnie Walsh and coach Mike D'Antoni.
It was initially assumed that Garnett would resist a reunion with the controversial point guard after Marbury broke up their Minnesota partnership following less than three seasons together by forcing a trade to New Jersey. But after the January report about Boston's and Marbury's mutual interest, Garnett and Marbury both spoke publicly about their willingness to play together again.
Earlier this month, Boston's Ray Allen told ESPN.com that the defending champions would have little trouble integrating Marbury into their locker room in spite of Marbury's reputation for causing chemistry problems.
"The great thing about this locker room is that Doc [Rivers] can coach," Allen said. "The coaches can coach. They don't have to manage this team. The [veteran] players do a great job making sure that we are all prepared to play every day and we keep whatever grumblings down."
Marc Stein is a senior NBA writer for ESPN.com. Senior ESPN.com NBA writers J.A. Adande and Chris Sheridan contributed to this report.