The deal reportedly won't become official until July 10.
"It's unfortunate that I wasn't given a meaningful opportunity to contribute last season in New York," he said in a statement to ESPNNewYork.com. "I was really looking forward to the upcoming year as a chance to show the organization what they missed out on last year, and pushing our team towards the Finals.
"I have nothing but positive things to say about the city of Toronto and its great fans, having been drafted by the Raptors 17 years ago. Given that my goal at this point in my career is to have a shot at a championship, however, I'll have to evaluate my options going forward. I've enjoyed a great career, and under the right circumstances I hope to continue making an impact in the league."
Initially drafted by Toronto, Camby signed a three-year, $13.1 million deal with the Knicks last summer, but due to foot and calf injuries and coach Mike Woodson's preferences, he played in only 24 games, averaging 1.8 points and 3.3 rebounds, and three during the postseason.