Mark Bartelstein told The Athletic that the deal has a player option for the second year.
The Wizards held a $20 million team option with Parker for the 2019-20 season, and the deadline to exercise it was June 29, but the team declined it, making him a free agent.
The former Duke star and second overall pick in the 2014 NBA draft landed in Washington in February. He came off the bench in all 25 of his appearances for the Wizards, averaging 15.0 points on a career-high 52.3% shooting to go with 7.2 rebounds and 2.7 assists per game.
It was a welcome change of scenery for Parker. He had signed a two-year, $40 million deal with his hometown Bulls last offseason but quickly fell out of favor in Chicago, losing significant playing time before he was traded. Defense was the culprit; on the season, Parker ranked 87th of 100 qualified power forwards in defensive real plus-minus (-0.91).
Parker, 24, spent his first four seasons with Milwaukee before signing with Chicago. He holds career averages of 15.1 points, 5.7 rebounds and 2.1 assists.