The Timberwolves had declined to extend Telfair the one-year, $3.5 million qualifying offer for which he was eligible, making him an unrestricted free agent.
Telfair started slowly after arriving in Minnesota from Boston last summer in the Kevin Garnett trade, but Timberwolves coach Randy Wittman grew fond of him as he developed into a steady point guard. A sprained ankle kept him out for the last 21 games of the season.
Telfair averaged 9.3 points, 2.3 rebounds and 5.9 assists and finished 10th in the NBA in assist-to-turnover ratio. The former lottery pick enters his fifth season in the NBA after a heralded entry straight out of high school.