In return, New York is sending Cam Reddish, Ryan Arcidiacono, Svi Mykhailiuk and a protected 2023 first-round pick to Portland, sources say. The lottery-protected pick turns into four future second-round picks if not conveyed this year.
The deal comes on the eve of the NBA trade deadline.
Acquired in a deadline deal with the New Orleans Pelicans last season, Hart is averaging 9.5 points, 8.2 rebounds and 3.9 assists for the Trail Blazers this season. He has played in all 51 games for the team, starting each, and is averaging a career-high 33.4 minutes.
Hart, 27, is one of the best undersized rebounders in the league and he's capable of defending multiple positions. His 8.2 boards are the most by a player at 6-foot-5 or shorter. He also leads the NBA in offensive rebounds per game among players 6-5 or shorter.
Offensive rebounding is a strength for the Knicks this season, as they rank third in offensive rebounding percentage and first in second-chance points per game.
Offensively, Hart is a good facilitator and shoots over 70% at the rim. His 3-point attempts, however, have declined sharply this season, down to less than 3 per game after averaging 4 in 2021-22.
Hart is making $12.9 million this season and has a player option for the same amount next season. If he exercises the option to return by a June 25 deadline, the contract becomes nonguaranteed.
The deal reunites him with Knicks star guard Jalen Brunson, his former teammate at Villanova. The two helped the Wildcats win a national championship in 2016.
Brunson had his No. 1 jersey retired at halftime of Villanova's game against DePaul on Wednesday night. He was seen on video first learning of the trade after the ceremony and yelled out: "Yes!"
Reddish, 23, has been looking for a new opportunity after falling out of the rotation with the Knicks. New York acquired the Duke product in a trade with the Hawks last year, but Reddish has not played in a game since Dec. 3 and hasn't started since Nov. 18.
The No. 10 pick in the 2019 NBA draft, Reddish has struggled to find consistent playing time throughout his career but has shown flashes of potential as a scorer at various points.
Reddish is averaging 8.4 points per game while shooting nearly 45% from the field.
He's in the final year of his rookie season and is set to hit restricted free agency this summer.
Information from ESPN's Bobby Marks was used in this report.