Gooden, 31, had two years and $13.36 million left on a five-year, $32 million contract he signed with the Bucks in 2010. He will get paid despite being waived, but Milwaukee won't have the money count against the salary cap.
The amnesty provision was added in the collective bargaining agreement in 2011, allowing teams to waive a player without his salary counting against the salary cap or luxury tax. Teams had a Tuesday deadline to invoke the clause.
Gooden played in 107 games over three seasons with the Bucks. The 6-foot-10 Gooden averaged career lows of 3.3 points and 1.9 rebounds in 16 games last season.
Selected fourth overall by Memphis in 2002, Gooden has played with nine teams in his career, averaging 11.8 points and 7.6 rebounds.