McRae and the Nuggets reached a buyout agreement on Sunday, with ESPN’s Adrian Wojnarowski first reporting that Phoenix would likely be his destination.
McRae, 28, started the season with Washington and was traded to Denver last month. He averaged 12.8 points in 29 games with the Wizards, shooting 42% from the floor and 38% from 3-point range.
The Suns have lost three straight games and currently own the third-worst record in the Western Conference at 24-37. McRae previously spent time with Phoenix back in 2016, signing two 10-day contracts with the organization.
Because McRae is on a minimum-salary contract, the Suns can use the minimum salary exception to place a claim on him. Doing so will give the team his Early Bird rights at season’s end, and won’t cost any extra money, since Phoenix will only have to pay the prorated salary left on his deal. The Nuggets, meanwhile, will get to remove McRae’s cap hit from their books entirely, giving them some extra flexibility below the tax line.