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The Knicks and Pistons agreed to the deal on Sunday afternoon after periodic talks that stretched over a couple of months, sources said.
Rose rejoins the Knicks, where he spent a turbulent 2016-17 season struggling in the triangle offense during the Phil Jackson regime. Rose was the youngest MVP in league history under Thibodeau with the Chicago Bulls in 2011, and played for him again with Minnesota in the 2017-2018 season.
The Knicks are undergoing a competitive uptick under Thibodeau in his first season as coach, emerging as one of the league’s top defensive teams. The arrival of Rose brings help for the NBA’s 25th-rated offensive team and creates an overlap of veteran guards, including starter Elfrid Payton and Austin Rivers.
Rivers is likely to become a player that contenders seek in trade talks as teams look to fortify backcourts closer to the March 25 trade deadline.
The Pistons are moving toward a rebuild and worked to find Rose a destination that had appeal to him. Rose, 32, averaged 14 points and four assists on 42 percent shooting this season.
For Detroit, Smith — the No. 9 overall pick in the 2017 draft — is viewed as a reclamation project similar to forward Josh Jackson, who signed with the Pistons in free agency. Smith, 23, recently volunteered to join the G League Bubble in Orlando to find playing time.
New York entered Sunday’s game against Miami ranked 25th in the NBA in offensive rating, scoring 106.9 points per 100 possessions. The Knicks defense was rated No. 6 in the NBA (107.9 points per 100).
ESPN’s Tim Bontemps contributed to this report.