Sources told ESPN that Nowitzki, who faced a Wednesday deadline to either become a free agent or lock himself into an $8.7 million option next season, formally notified the club of his intentions with one day to spare.
Nowitzki won't be the only Maverick to opt out by the deadline. Sources told ESPN on Tuesday that Chandler Parsons will follow through on his plans to become a free agent despite Mavs owner Mark Cuban's attempts to convince him to opt in for the final season of his three-year, $46 million contract. With the salary cap spiking to a projected $94 million this summer, Parsons' camp expects him to receive a significant raise in free agency.
In addition, guard Deron Williams is expected to join Nowitzki and Parsons in notifying Dallas that he's opting for free agency, according to sources and multiple reports.
After premature reports in May that he had already come to a decision, Nowitzki weighed whether to opt in or opt out for much of the past month before ultimately deciding to return to the open market for the first time since the summer of 2014.
Yet the overwhelming expectation, both in Dallas and leaguewide, is that Nowitzki intends to stay with the Mavericks, who acquired him on draft night in 1998 and have made him the focal point of their franchise ever since.
"Dirk gets to do what Dirk wants," Cuban said during a recent public appearance. "Period, end of story.
"I told him the other day: If Dirk wants to be the head coach, we'll move Rick [Carlisle] over a little bit. Dirk's done so much for this franchise, he's earned that opportunity."
In his last public comments on the matter before leaving the country to see his brother-in-law, Martin Olsson, play for Sweden, Nowitzki said earlier this month: "Since I felt great, played decent, I might opt out and sign a two- or three-year deal. That's probably the plan for now."
Nowitzki, who turned 38 this past Sunday, has spent his entire 18-year career with the Mavericks, earning an MVP award, one NBA Finals MVP trophy and 13 All-Star selections. He is sixth on the NBA's all-time scoring list with 29,491 career points and is on pace to surpass Wilt Chamberlain to move into the top five at some point in the 2017-18 season as long as he avoids significant injury.
Tuesday's decision takes Nowitzki out of the final season of his three-year, $25 million contract, which represented a steep hometown discount to provide the Mavs the salary-cap flexibility to construct a contender during Nowitzki's twilight years. The Mavs, however, have failed to get out of the first round since their 2011 title run, although Nowitzki led them in scoring again this past season.
The 7-footer from Germany has consistently maintained that he fully intends to finish his career with the Mavs, saying he would be particularly proud to play 20 seasons with only one team. Kobe Bryant, who retired at the end of this past season after 20 seasons with the Los Angeles Lakers, is the only player in league history to spend an entire two-decade career with only one franchise.
Nowitzki has acknowledged that his decision to stay in Dallas would be much more difficult if the Mavs hadn't broken through to win the title in 2011. With a championship ring in his possession, Nowitzki has repeatedly said the only reason he would consider playing for another franchise is if the Mavs opted for a full-fledged rebuilding plan, which doesn't interest Cuban in the least.
Information from ESPN's Tim MacMahon was used in this report.