Turkoglu is due $12 million this season, but if he is waived by Tuesday, he will only receive $6 million.
When he is waived, Turkoglu, 34, will become a free agent and can sign with another team.
According to the Orlando Sentinel, Turkoglu and the team agreed that he would not play or practice with the team until his contractual situation was resolved.
He didn't participate in training camp, the preseason or see action in the regular season this year and was suspended by the NBA for 20 games last February for testing positive for methenolone.
THOMSEN: Third-best in the East? That's a difficult question Turkoglu last saw game action last season, appearing 11 times. For his career, Turkoglu has averaged 11.9 points and 4.2 rebounds in 897 career games.