Plumlee appeared in 21 games for the Knicks last season, averaging 1.9 points and 2.4 rebounds per contest.
The 24-year-old Plumlee spent four seasons at Duke before going undrafted in the 2016 NBA draft.
New York signed him last summer, and he went on to shuttle between the Knicks and their G League team in Westchester.
For the Knicks' developmental team, the 7-footer put up a solid stat line of 12.5 points, 9.1 rebounds and 1.3 blocks per game in 15 appearances.
The Knicks' roster move came one day after they signed Hawks restricted free agent Tim Hardaway Jr. to a four-year, $71 million offer sheet, per ESPN.com's Wojnarowski and Ian Begley.