Atlanta has two days to match the contract of the restricted free agent.
Hardaway spent the first two seasons of his career with New York before being traded for the rights to Jerian Grant.
The 25-year-old Michigan product enjoyed a breakout 2016-17 season with the Hawks. He averaged career highs in points (14.5), rebounds (2.8), assists (2.3) and threes (1.9) while shooting 45.5 percent from the field, which was also the best mark of his four-year NBA career.
He had struggled to find a niche in the Atlanta rotation during his first season with the team. But a more expansive role this past year, including 30 starts among his 79 appearances, led to his best season.
Brad Rowland of Peachtree Hoops felt Hardaway was among the league's most improved players:
Brad Rowland @BTRowland
Tim Hardaway Jr. won't (and shouldn't) win Most Improved Player but he's probably a top-10 candidate.2017-4-9 17:51:20
While his uptick in performance helped the Hawks secure the fifth seed in the Eastern Conference with a 43-39 record, it also brought him onto the radar for an offer sheet. Now the front office must decide whether to make the financial commitment after one big year and one down year.
In May, Chris Vivlamore of the Atlanta Journal-Constitution passed along comments from Hardaway, who expressed interest in staying with the organization.
"I want to be here, point blank," he said. "They brought me here because they believed in me and believed in what I'm capable of doing. I'm thankful for it. ... As of now, I'm still here. This is my team. I'm an Atlanta Hawk still. There is no other team right now. My mind and my focus is with the Atlanta Hawks."
The impact Hardaway made last season is what many envisioned when the Knicks took him in the first round of the 2013 draft. Over the next couple of days, the Hawks will have to determine whether they believe he can build off that success to justify matching New York's offer sheet.