Ellis has eight seasons of NHL experience, including the past six in Buffalo. He had four goals and two assists in 50 games with Buffalo last season, and also played 25 games in Rochester.
Ellis and defenseman Drew Bagnall, who was also demoted, must first clear waivers.
The moves made Tuesday leave the Sabres with 31 players on their roster. Buffalo has two preseason games left before opening the season hosting Columbus on Oct. 9.