Jefferson, 26, has made 18 mostly brief appearances with the Magic this season, averaging 0.8 PPG and 1.3 RPG in 4.1 MPG. He also appeared in 12 games with Orlando last season.
Jefferson signed a two-year contract with Orlando in early November after playing for the team on a two-way deal last season. However, the second year of the minimum contract was not guaranteed. Jefferson, who was on a two-way contract with the Timberwolves for a good portion of the 2017/18 season, spent a majority of this season in the G League.
With Jefferson on his way out, it appears Orlando will retain Gary Clark for now. His second 10-day contract with the club expires on Friday night, so the club would have to re-sign him to a rest-of-season deal to keep him beyond that point.