World Peace had until Tuesday to exercise the early-termination option on his contract, and the veteran forward had publicly discussed the possibility of doing so in order to secure a new multiyear deal.
Instead, World Peace will receive the $7.7 million owed to him next season in the final season of the five-year deal signed with the Lakers in 2009.
Now the Lakers will have to decide whether they want to have World Peace on the team for 2013-14, or choose to waive him by using a one-time amnesty provision. Should the Lakers choose to amnesty World Peace, they would still owe him his full salary; however, the contract would not count against L.A.'s salary-cap figure and the move could end up saving the Lakers close to $30 million in luxury taxes.
Teams must inform the league of their plans to amnesty a player during a window from July 10-16, and the provision can be used only on a player who was signed before the new collective bargaining agreement was put in place in December 2011. Other than World Peace, the only amnesty options for the Lakers would be Kobe Bryant, Pau Gasol or Steve Blake.
World Peace, 33, is coming off a resurgent season despite the Lakers' struggles as a team. The 14-year veteran averaged 12.4 points (up from 7.7 in 2011-12) and 5.0 rebounds (up from 3.4) and improved his shooting percentages from the floor, 3-point line and foul line as well.
World Peace underwent surgery to repair a torn meniscus in his left knee late in the season and was back on the court in just 12 days before ultimately missing the Lakers' last game of a first-round playoff sweep to the San Antonio Spurs because of the same knee.
Late Monday night World Peace tweeted, "I had a great time here in LA!! Love you guys.. You are truly amazing. I have some news!!!" The tweet caused some to speculate that World Peace was going to opt out of his contract, but World Peace announced the "news" that he will be filming a reality television show with former NFL receiver Terrell Owens on Tuesday morning.