The third year of Carter's deal with Memphis is partially guaranteed, league sources said.
For Memphis, Carter is a terrific offensive talent to bring to its bench. Carter, 37, spent the past three seasons with the Dallas Mavericks. He averaged 11.9 points and a little more than 24 minutes per game while making 39.4 percent of his 3-point attempts last season.
He hit the biggest shot of the Mavericks' season with a buzzer-beating 3-pointer to beat the San Antonio Spurs in the third game of their first-round playoff series.
Carter has averaged 20.2 points, 4.9 rebounds and 3.7 assists in his 16-season NBA career.