(Susan Walsh / Washington Post)

The amnesty clause in the new collective bargaining agreement between the NBA and players’ union allows teams to remove the worst contracts from their books and, with around $62 million remaining on his contract, Arenas, a disappointment in Orlando, was a shoo-in for that designation.

The Magic will pay all of the $62 million unless a team puts in a bid for him in a modified waiver-wire process. The remaining money Arenas is owed will come off the team's salary-cap and luxury-tax totals immediately, according to the Orlando Sentinel.

Arenas, a former all-star guard, was shipped from the Washington Wizards to the Magic in exchange for Rashard Lewis in December 2010.