The school also announced that it would apply for his reinstatement by the NCAA.
"In order to move the matter forward, the University has declared James ineligible and will immediately apply for his reinstatement," the university's statement said. "Pending that notification, James will be withheld from competition but will continue to practice with the team.
"The NCAA is fully aware of the unique nature and challenges in this particular case, and the University is confident that the NCAA will render a fair and equitable decision consistent with its mission."
Wiseman's lawyers from Ballin, Ballin & Fishman and Farese, Farese & Farese released a statement Thursday morning, shortly before Memphis declared him ineligible.
"It has become clear to Mr. Wiseman that the lawsuit he filed last week has become an impediment to the University of Memphis in it's [sic] efforts to reach a fair and equitable resolution with the NCAA concerning his eligibility status. Therefore, Mr. Wiseman advised his legal team that he wished to withdraw his lawsuit. There will be no further comment at this time," the statement said.
Memphis said last week the NCAA had initially declared Wiseman eligible in May, but further investigation found documentation of Memphis coach Anfernee Hardaway's payment to Wiseman's family in 2017. The school said Wiseman had no knowledge of the payment.
The school acknowledged last week that Hardaway, before he became the Tigers' coach, provided $11,500 in moving expenses for Wiseman and his family to move from Nashville to Memphis in the summer of 2017. At the time, Hardaway was Wiseman's AAU coach and would then coach him at Memphis East High School. Hardaway, a Memphis alum, was considered a booster due to a $1 million donation he gave the school in 2008 to build a sports hall of fame.
Wiseman was ruled ineligible Friday before a Shelby County judge issued a restraining order allowing Wiseman to play in that night's game. The NCAA issued a statement saying, "The University of Memphis was notified that James Wiseman is likely ineligible. The university chose to play him and ultimately is responsible for ensuring its student-athletes are eligible to play."
Wiseman played in the Tigers' first three games, averaging 19.7 points, 10.7 rebounds and 3.0 blocks.
The No. 1-ranked prospect in the 2019 class and the projected No. 1 pick in June's NBA draft, Wiseman moved to Memphis after spending his first two years of high school at The Ensworth School. Wiseman joined the Team Penny grassroots program on the Nike EYBL circuit that spring and then enrolled at East High School.
Wiseman ultimately committed to Memphis over Kentucky in November 2018, headlining the Tigers' No. 1-ranked recruiting class.