J.R. Smith to opt out of final year of contract

J.R. Smith will opt out of the final year of his contract with the Knicks. (Ron Hoskins/Getty Images)

New York Knicks shooting guard J.R. Smith will become an unrestricted free agent July 1, Jared Zweling of ESPNNewYork.com reported on Tuesday afternoon. The 2012-13 Sixth Man of the Year will announce before June 30 that he will opt out of his $2.9 million player option for next year.

Smith, who qualifies for the Early Bird exception because he played with the same team for the past two years, was on the books for $2.8 million this past season and can re-sign with the Knicks for $4.9 million in 2013-14. According to the terms of the Early Bird rights, a team can re-sign a player that enters free agency for 175 percent of his annual salary the previous season or for the average NBA salary, whichever is greater.

This past regular season was Smith's best; the 27-year-old averaged 18.1 points and 5.3 rebounds per game, both career highs. But despite his initial contributions, Smith's performances declined dramatically in the playoffs. After shooting 42 percent from the field this year, Smith struggled throughout the postseason, shooting 33 percent over 11 games, including three sub-30 percent outings during the Knicks' second round loss to the Indiana Pacers.