The Magic will send the Heat a heavily protected 2016 second-round pick in return. The deal is essentially a cash dump for the Heat.
Offloading Napier into the Magic's cap space could save the Heat about $4.5 million in salary and luxury taxes. The Heat are currently in position to be the first team to pay the penal repeater tax this season.
Napier, the Heat's first-round pick in the 2014 draft, had a choppy rookie season, averaging 5.1 points and 2.5 assists in 51 games. His season included time in the D-League and ended early when he needed a sports hernia surgery in March.
Napier, who led Connecticut to a national championship, was a favorite of former Heat star LeBron James. The Heat traded up in the 2014 draft to take Napier just days after James opted out of his contract. The team subsequently downplayed whether James' public praise of Napier affected its decision to draft him.
Yahoo! Sports first reported the trade.