After opting out of an $11 million contract for next season with the Milwaukee Bucks, Monta Ellis is discussing a free-agent deal with the Sacramento Kings, league sources told CBSSports.com.

With several avenues closed off as teams fill their needs for guards in free agency, Ellis could wind up with the Kings, who began doing their homework on him weeks ago. According to a person familiar with the situation, Kings owner Vivek Ranadive began inquiring about Ellis around the time his purchase of the Sacramento franchise was completed in late May.

Ranadive, a former minority partner in the Golden State Warriors, identified Ellis as a possible free-agent target as he was finalizing his group's purchase of the Kings. Ellis, 27, played the first 6 1-2 seasons of his career in Golden State. The Kings hired former Warriors assistant Michael Malone as head coach in late May and later installed former Warriors executive Pete D'Alessandro as general manager.

The cap-strapped Knicks inquired early in the free-agent negotiating period about what it would take to sign Ellis, but have since agreed to re-sign sixth man of the year J.R. Smith on a four-year, approximately $25 million deal. The Nuggets briefly pursued Ellis, but are currently discussing a three-team sign-and-trade arrangement that would net them Randy Foye and a trade exception to plug the space left by Andre Iguodala, who would be signed and traded to Golden State, league sources confirmed on Monday.

Atlanta had been another possibility for Ellis, but the Hawks reportedly are exploring a sign-and-trade deal that would yield them Ellis' backcourt mate in Milwaukee, restricted free agent Brandon Jennings. If that arrangement is completed, it would involve a swap of Jennings for Hawks point guard Jeff Teague, who also is restricted.