"We welcome Dennis Smith Jr. to the Pistons family," Pistons general manager Troy Weaver said in a statement. "Adding another young player who was a high draft pick alongside a draft asset advances our goals in building for the future.
"We thank Derrick Rose for his contributions on and off the court during his time as a Piston and wish him and his family well as they move forward."
The Knicks and Pistons reportedly agreed to the deal Sunday afternoon.
Rose rejoins the Knicks, where he spent the 2016-17 season. He averaged 18 points and 4.4 assists that season before jumping to the Cleveland Cavaliers.
In 15 games this season, Rose has averaged 14.2 points and 4.2 assists on 43% shooting. He is in the final year of a contract that pays him $7.7 million.
Smith, who was the No. 9 overall pick in the 2017 NBA Draft, averaged three points and one assist in three games with the Knicks this season. The 23-year-old guard recently volunteered to join the G League bubble in Orlando, Fla., to get more playing time.