The move was expected and will make Grimes eligible for a contract extension in the offseason.
Grimes, 23, is 6-foot-5 and averaged 11.3 points in 71 games last season, his second in the NBA. The No. 25 pick in the 2020 NBA Draft out of Houston, he’s averaging 7.3 points through the first three games this year.
Grimes has been starting alongside Jalen Brunson in the backcourt, but is shooting just 36 percent from the field in the first three games.
New York (1-2) visits Cleveland for an Eastern Conference playoff rematch on Tuesday. The teams square off again Wednesday at Madison Square Garden.