The Magic had made strong pushes to acquire Denver's Carmelo Anthony or New Orleans' Chris Paul, but with those talks showing little progress, they were forced to seek other options.

Arenas, the centerpiece of Orlando's shakeup, had long been speculated as that alternative.

Magic president Otis Smith has been a close friend and mentor to Arenas going back to their days together at Golden State, when Smith was in the front-office and Arenas was a young player. Smith has said in the past that Arenas' troubles, which included a 50-game suspension last season for bringing a gun into the Wizards' locker room and faking an injury to sit out a preseason game this year, are not a concern.

Of greater concern with the three-time All Star has been his health. Arenas has had several knee problems that limited him to 47 games over the previous three seasons. But while playing alongside - and often behind - No. 1 overall pick John Wall this season, Arenas showed flashes of his old self.

He has averaged 17.3 points and 5.6 assists per game this season, including a season-high 31 points in a loss against the Magic on Nov. 27.