The Houston Rockets have unexpectedly emerged from their long-running efforts to trade Tracy McGrady with an agreement in place to acquire coveted guard Kevin Martin from the Sacramento Kings, ESPN.com has learned.

Multiple sources told ESPN.com that the Rockets and Kings will spend Thursday trying to make this a three-way deal that lands McGrady with the New York Knicks, who have been McGrady’s preferred destination ever since he and the Rockets mutually agreed in late December to find the 30-year-old a new team via trade.

“I think it will happen,” one source close to the situation told ESPN.com of McGrady winding up with the Knicks.

• See the full Martin trade story.

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