LeBron James has informed the Cleveland Cavaliers he will not exercise his $35.6 million option and will become a free agent.

Rich Paul notified the Cavaliers of his decision on Friday morning. James will be a free agent for the third time in four years.

James is widely expected to choose between the Cavaliers and the Los Angeles Lakers. Sources suggest that James' interest in joining the Lakers is strong.

The Houston Rockets almost certainly would have needed to acquire James in an opt-in-and-trade scenario.

James can sign a five-year, $207.4 million deal with the Cavaliers, or as much as a four-year, $152.3 million deal with a rival team. James can also sign a shorter deal with the same starting salary.

According to a source that spoke with ESPN's Dave McMenamin, Cleveland's "Plan A, B and C in free agency is to keep LeBron."