The Cavaliers announced Wednesday night that they're releasing Davis in advance of Friday's amnesty deadline after exploring both trade and buyout possibilities with the former All-Star.
Rougly $27 million of the nearly $30 million left on Davis' contract is guaranteed. The Cavs would still have to pay Davis all that money if they send him away, but the amnesty clause in the new labor agreement -- unlike the 2005 version -- give teams salary cap relief as well as tax relief on a player released via amnesty.
"We would like to thank Baron for his contributions to the team during his time in Cleveland," general manager Chris Grant said in a statement. "He has been an absolute professional since the day he joined the Cavs and we now wish him the best in the future."
Once he's formally released, Davis will first be made available to teams with salary cap space in a waiver auction. That's the mechanism which allowed the Los Angeles Clippers to put in a winning blind bid of just over $2 million for Chauncey Billups after Billups was released by the New York Knicks via amnesty.
But the immediate priority for Davis is getting healthy. A back injury has kept Davis off the floor since training camps opened last week and has sidelined him indefinitely.
Davis' agent, Todd Ramasar, told ESPNNewYork.com's Ian Begley that "Baron is out a minimum of 8-10 weeks if there's no setbacks in his physical therapy."
If he clears waivers 48 hours after his release, Davis, 32, will then have the right to proceed to free agency and pick his next team.
Sources with knowledge of Davis' thinking told ESPN.com in early November that the former UCLA star's hometown Los Angeles Lakers and the Knicks are the two teams he's always dreamed of playing for. Davis also still has a good relationship with the Charlotte community, Bobcats coach Paul Silas and Bobcats assistant coach Stephen Silas, factors which would likewise make the Bobcats an option if owner Michael Jordan is interested.
The Cavs weighed whether to keep Davis for one more season and try to play him alongside No. 1 overall pick Kyrie Irving. Cleveland coach Byron Scott, who had Davis in New Orleans, had also spoken optimistically of the idea that Irving and Davis could function well together in the same backcourt.
Yet the overriding sentiment within the organization calls for handing the keys of the franchise to Irving right away. With Ramon Sessions on the books in Cleveland for two more seasons at a cap-friendly salary and Daniel Gibson coming off his best season, letting Davis go now eases a potential backcourt logjam.
Davis arrived in Cleveland in February in a trade-deadline deal for Mo Williams that was clinched by the Clippers' willingness to include their first overall pick in the June draft unprotected. That pick became Irving.
Marc Stein is a senior NBA writer for ESPN.com.