The Wizards made the move Wednesday, beating a deadline that will keep his contract from being guaranteed for the rest of the season.
Rice appeared set to be in the rotation coming out of training camp, but the surprising play of Rasual Butler and the development of Otto Porter left Rice with little playing time. He appeared in only five games and was shipped to the D-League in late November.
Rice was a second-round draft pick in 2013. He played in 16 games over two seasons.