Ferrell, 25, has averaged 10.6 points and 3.0 assists in 118 games for the Mavs, including 50 starts. He joined the Mavs as a call-up from the developmental league during the 2016-17 season and performed so well that the team signed him to a two-year contract when his 10-day deal expired.
The Mavs rescinded Ferrell's $2.9 million qualifying offer on Friday, making the guard an unrestricted free agent. However, that was a formality, as the Mavs and Ferrell were in the final stages of negotiating his two-year deal, which costs Dallas slightly less in annual salary.
A source said that Dallas is likely to give the remainder of its cap space (approximately $6 million) to longtime face of the franchise Dirk Nowitzki, whose $5 million team option was declined to give the Mavs more flexibility in free agency.
The Mavs also still have their $4.4 million cap-room exception. The New York Times first reported the Mavs' deal with Ferrell.