Plumlee and Solomon Hill were traded to Memphis by the Atlanta Hawks in exchange for Chandler Parsons in July.
At the time of the deal, ESPN's Bobby Marks praised the Grizzlies for turning the $25.1 million owed to Parsons into two separate contracts that could have made it easier to make future deals.
Instead, the Grizzlies simply opted to eat Plumlee's salary for the 2019-20 season.
Per Marks, Memphis will have a $12.5 million cap hit for Plumlee. Rabb will only count $392,000 against the cap since he was waived before his $1.6 million salary became fully guaranteed.
Rabb, who was originally selected by the Orlando Magic in 2017, has spent his entire career with the Grizzlies after his draft rights were traded to the organization.
The Grizzlies are entering a new era under first-year head coach Taylor Jenkins. Their system will likely feature a fast-pace style of play with rookie Ja Morant running the offense, along with versatile forwards Jaren Jackson Jr. and Brandon Clarke who can play in space on the floor.
Waiving Rabb and Plumlee gets Memphis' roster down to 15 players heading into the regular-season opener Wednesday against the Miami Heat.