Hardaway, a 25-year-old shooting guard, played his first two seasons with the Knicks before being traded on draft day in 2015 to Atlanta for the rights to guard Jerian Grant.
The Hawks have two days to match the deal or let Hardaway go. They have indicated in the past that they would try to keep him.
Detroit Pistons assistant coach Tim Hardaway Sr. told the New York Post that his son had "no bad blood" with the Knicks and wouldn't mind a return to the organization with Phil Jackson no longer running the team. It was Jackson who traded Hardaway.
It is believed that if Atlanta does not match, New York would not be able to bring back guard Derrick Rose for financial reasons. The addition of Hardaway would also eliminate almost all the Knicks' projected cap space, unless they can trade Carmelo Anthony or Courtney Lee.
During his first season with the Hawks, Hardaway told the Post: "Everybody wants to stay with the team they got drafted with. A lot of times, it doesn't work that way. You got to move on and build a new legacy somewhere else.
"The passion you bring, you have to take to that team you're with. They brought me here for a reason. They know what I can do. I'm here for a reason."
Hardaway raised his career average to 11 points after scoring 14.5 per game last season, shooting a career-best 45.5 percent from the field in 79 games (30 starts).