J.R. Smith returning to Knicks with two-year deal

Free-agent shooting guard J.R. Smith has agreed to return to the Knicks on a contract that will pay him $2.8 million in the first year with a player option in the second.

"I have decided to re-sign with the Knicks," Smith said in a statement. "I just felt that, despite my other options, New York is the best situation for me. Coach [Mike] Woodson showed a lot of faith and trust in me last season, as did [Knicks owner] Mr. [James] Dolan and the organization. My teammates are great to play with and the New York fans are the best. I can't wait to get started."

The 26-year-old Smith averaged 12.5 points, 3.9 rebounds and 2.4 assists off the bench last season after signing with New York in February following a stint in China. He shot 40.7 percent from the field and 34.7 percent from three-point range in 35 games.

Earlier Monday, the Knicks agreed to a four-year, $15 million deal with small forward Steve Novak, the NBA leader in three-point percentage last season. They also acquired 38-year-old center Marcus Camby in a sign-and-trade deal with Houston.

ESPNNewYork.com first reported Smith's decision.