The agent for Marquis Daniels told The Associated Press in an e-mail on Monday that the Pacers have indicated that they will not pay the final year of the deal. Daniels would have made $7.3 million next season, but now he's an unrestricted free agent.
A Pacers spokesman says the team cannot comment on the situation until free agency officially begins Wednesday.
Indiana is likely to start Brandon Rush at shooting guard during the 2009-10 season.