The victory kept the Wolverines unbeaten in five games and made them champions of the NIT Season Tip-Off tourney.
Hardaway hit 10-of-15 shots from the field, but left the game late in the second half after taking a knee to the back of his head in a scramble for a loose ball.
Michigan hit 51.8 percent from the field with Trey Burke and Nik Strauskas both scoring 10 points.
Kansas State suffered its first loss after winning five games to open the season. The Wildcats were led by Rodney McGruder with 16 points.
The Wolverines took a five-point lead at halftime and then opened the second period on a 14-3 run.
Hardaway was named the tournament's most valuable player.