The Grizzlies now have 15 guaranteed contracts and created a $3.4 million trade exception with the deal. They were facing a numbers crunch before the Daniels trade with 16 guaranteed contracts and restricted free agent JaMychal Green still unsigned.
Memphis still will need to waive or trade a player before the season starts if Green does sign.
Phoenix, meanwhile, inherits two years at $3.4 million and $3.3 million for Daniels. The Suns now have 14 guaranteed contracts and $10.8 million remaining in cap space.
Daniels averaged 8.2 points, 1.5 rebounds and 0.7 assists during the 2016-17 season.
ESPN's Adrian Wojnarowski and Bobby Marks contributed to this report.