Green was due to make $1.4 million next season but the Clippers decided to waive him before his contract became guaranteed. The Clippers were interested in re-signing him if he had cleared waivers, according to sources, but Green's contract is now fully guaranteed by Orlando.
Green appeared in 55 games for the Clippers last season, making nine starts and averaging 5.0 points and 1.4 rebounds in 15.8 minutes per game.
Green originally signed with Los Angeles on July 30, 2012, and played in 127 career regular-season games with the Clippers.
Earlier Monday, the Magic waived Jameer Nelson, saving about $6 million by making the move before the veteran point guard was due to make $8 million in the final year of a three-year contract. The Magic will now only owe Nelson $2 million in guaranteed money.