The Wings also sent the No. 16 overall pick to the Coyotes in exchange for the No. 20 pick, plus a second-rounder (No. 53) as well as Joe Vitale.
Datsyuk announced his retirement from the NHL on June 18; he's headed back to his native Russia to play in the KHL. However, the Wings were stuck with his cap charge from the one year remaining on his contract.
Now they've moved it and created important cap room. The Red Wings are believed to have interest in pending unrestricted free agent Steven Stamkos, like many teams do, and are expected to make him a substantial offer July 1 if the Tampa Bay captain hits the market and doesn't re-sign with the Lightning.
"We have the flexibility now to do what we want," Red Wings general manager Ken Holland said.
Holland said the Coyotes initiated trade discussions after the No. 13 selection was made.
"It was a unique situation for us," Holland said. "We were prepared to move back, we get an extra second-round pick, we don't have to pay [Datsyuk] and we get Joe Vitale's contract."
The Wings used the No. 20 pick to select defenseman Dennis Cholowski, and the Coyotes used the No. 16 pick to select defenseman Jakob Chychrun.
The Associated Press contributed to this report.