Hardaway played a key role in the Wolverines' school-record 31-win season that ended in the NCAA Tournament final, in which Louisville beat Michigan 82-76 to win the title. He scored 12 points in the game, to go with five rebounds and four assists.
Hardaway -- the son of five-time NBA All-Star Tim Hardaway -- averaged 14.5 points, 4.7 rebounds and 2.4 assists a game this past season.
"After talking it over with my family, the coaching staff and others in my support system, I have decided to pursue my dream of playing in the NBA," Hardaway said. "I have appreciated everyone's support and patience while I made this decision.
"It has always been a dream of mine to play in the NBA and I feel that I am ready to work toward this dream."
Hardaway joins teammate Trey Burke, who won several national Player of the Year awards this season, in leaving Michigan for the NBA. Burke was a sophomore guard for the Wolverines.