Citing league sources, Wojnarowski added the Magic "had discussed several trade scenarios in the past several months, including conversations with the Sacramento Kings over the weekend, but no deal materialized."
Hezonja, the fifth overall pick in the 2015 NBA draft, will now be an unrestricted free agent at season's end.
Hezonja was billed as a high-flying, upside-laden swingman after he emerged as a standout with FC Barcelona, but he's struggled to find a stable rotational niche with the Magic through two seasons and change.
After averaging a career-high 6.1 points per game as a rookie, the Croatian managed 4.9 points per game on 35.5 percent shooting from the field and 29.9 percent shooting from three in a reduced bench role last season.
Six games into the 2017-18 campaign, Hezonja—who was selected by since-jettisoned general manager Rob Hennigan—is averaging 4.5 points and 2.3 rebounds in just 13.0 minutes a night.
On the financial front, the Magic freed up an additional $5.1 million in cap space for next season by sealing Hezonja's fate, per Spotrac.
Now on an expiring deal, the 6'8'' combo forward will attempt to make the most of his limited minutes in Orlando as he attempts to prove to the league's other 29 teams that he will be worth a flier come summertime.