The team announced the move Tuesday. Andersen averaged 5.3 points, 4.6 rebounds and 1.44 blocked shots in 32 games with the Nuggets last season.
He first joined the Nuggets as an undrafted free agent in 2001 and left for New Orleans in 2004. NBA officials suspended him in 2006, citing violations of the league's drug policy, but he later rejoined the Nuggets.
The Nuggets made the playoffs last season, but Andersen didn't play. The Nuggets had excused him from team-related activities after Douglas County sheriff's deputies searched his home as part of an investigation by the department's Internet Crimes Against Children unit. No criminal charges have been announced.