Grant was selected with the 19th pick in Thursday night's draft, a pick originally owned by the Washington Wizards but obtained by the Hawks in a prior trade.
Hardaway, the Knicks' 2013 first-round draft pick, scored 11.5 points per game on 39 percent shooting last season for New York.
Grant, a senior combo guard from Notre Dame, averaged 16.5 points on 47 percent shooting. He will have a chance to play big minutes in a Knicks backcourt that has just two players returning in Jose Calderon and Langston Galloway.
Hardaway, 23, struggled on the defensive end at times in his first two seasons for New York, which won just 17 games last season. He is a career 35 percent 3-point shooter.