The signing of Martin, 37, could happen on Friday.
The Bucks acquired Wolters in a trade after he was selected with the No. 38 overall pick in the 2013 draft out of South Dakota State by the Washington Wizards.
Over 11 games this season, Wolters averaged 2.3 points and 0.9 assists in 12.9 minutes per game, down from 22.6 mpg last season.
The Bucks (19-18) are in sixth place in the Eastern Conference. They host the Minnesota Timberwolves (5-29) on Friday.