Dragic was limited to 36 games for the Heat last season, averaging 13.7 points and 4.8 assists -- which represent the same averages for his 11-year career with Miami, Phoenix and Houston. He had until later in the month to decide on his option, and the move means he can now be included in trades if the Heat are so inclined. He turned 33 last month and was a 2018 All-Star.
Dragic said last month, "I love Miami and would love to always be in Miami."
The Heat are still waiting to hear Hassan Whiteside's decision on his $27.1 million option for next season. He is expected to accept and, like Dragic, will then be in the final year of his contract. Udonis Haslem still has not said if he will be back for a 17th season, and Miami has about four more weeks to decide on the guaranteed portion of Ryan Anderson's $21.3 million contract.
Miami holds the No. 13 pick in next week's NBA draft.
The Associated Press contributed to this report.