An All-Star and the Nuggets' best defender, Iguodala is set to make $16.2 million next season. By opting out, he'll have the ability to sign a five-year contract with the Nuggets or a four-year deal with another team.
Iguodala averaged 13 points, 5.4 assists and 5.3 assists last season, his first with the Nuggets after arriving in a four-team blockbuster trade from the Philadelphia 76ers that also involved Dwight Howard and Andrew Bynum.
Iguodala helped the Nuggets to a 57-25 record and the Western Conference's No. 3 seed. However, Denver was upset by the Golden State Warriors in the first round of the playoffs, which led to the firing of George Karl, the 2013 Coach of the Year.
Former Memphis Grizzlies coach Lionel Hollins is expected to interview for the Nuggets' vacant head coaching job this weekend. Team president Josh Kroenke has said he's in no hurry to hire a coach or GM.
Karl's dismissal came less than a week after Masai Ujiri, the league's Executive of the Year, left the Nuggets to take over as GM of the Toronto Raptors.
In perhaps a bit of good news, Danilo Gallinari, who was expected to miss at least half of next season following surgery to repair a torn ACL, may return sooner than expected.
Gallinari underwent surgery this week at the Steadman Hawkins Clinic in Vail, where he was operated on by noted surgeon Dr. Richard Steadman.
Team spokesman Tim Gelt forwarded a statement from the clinic to The Associated Press on Friday night that read: "Danilo Gallinari had an arthroscopic procedure to promote healing of his ACL tear, which was found to be partially torn at the time of surgery. Dr. Steadman has performed over 2,000 of these procedures. We are hopeful that Danilo will return to basketball sooner than if he had a complete ACL reconstruction."
Gallinari also posted a video Friday on his official Facebook page in which he delivered the good news, saying in Italian that his recovery time will be "completely different" that previously expected.
Information from The Associated Press was used in this report.