The Grizzlies acquired Waiters as part of a three-team trade with the Miami Heat and Minnesota Timberwolves on Thursday. Memphis also received forward Justise Winslow and James Johnson from the Heat, while sending forwards Andre Iguodala, Jae Crowder and Solomon Hill to Miami.
The Timberwolves later joined the deal, receiving Johnson from the Grizzlies in exchange for big man Gorgui Dieng.
Waiters played only three games for the Heat after serving three suspensions this season, including a 10-game ban following a drug-related incident on a team plane.
The Grizzlies will owe Waiters about $4.2 million over the next three seasons. According to ESPN, if the team opts against using the stretch provision, the Grizzlies will have a $12.1 million cap hit this season and a $12.65 million hit next year.
Waiters, 28, has averaged 9.3 points, 3.7 rebounds and one assist per game this season. Since entering the NBA in 2012, he has averaged 13.2 points and 2.8 assists per game in 412 career contests (211 starts).