Washington, 23, is 6-foot-3 and also finished last season on a two-way contract with the Knicks. He spent the first part of the year on a two-way deal with the Suns and averaged 7.9 points on 37 percent shooting. He spent his rookie year with the Pacers, averaging 9.9 points in 48 games.
Washington did not appear in a game with the Knicks after signing last season, but clearly they liked what they saw enough to bring him back and keep him in the organization.
New York will have all three of its two-way spots filled once the move becomes official. The Knicks also have a full roster of 15 players on guaranteed deals.