Prigioni will be a restricted free agent on July 1. The Knicks will have an opportunity to match offers from other teams, but they will have limited resources from which to draw.
New York is over the salary cap and would have to use part of its mini-mid-level exception (worth approximately $3.1 million annually) to match an offer to Prigioni that exceeds the value of his qualifying offer ($988,872).
Prigioni has until July 23 to accept the offer. If he declines to accept by that date, the Knicks can rescind it.
The 36-year-old veteran averaged 3.5 points and 3.0 assists for the Knicks this past season. He emerged as a vital piece for New York late in the regular season. The Knicks reeled off 13 straight wins between mid-March and early April after inserting Prigioni into the starting lineup.
Prigioni started 10 of the Knicks' 12 playoff games, averaging 4.5 points and 3.2 assists.
With Jason Kidd retiring to become coach of the Nets and Prigioni testing free agency, the Knicks' point guard position is in flux.
Their top priority in free agency, according to a league source, is to retain Sixth Man of the Year Award winner J.R. Smith. They also might have to make a decision on Chris Copeland. The team extended Copeland a qualifying offer on Tuesday, but Copeland is expected to attract offers that exceed the value of the qualifying offer.
Ian Begley is a regular contributor to ESPNNewYork.com.