Haddadi is the first Iranian ever to play in the NBA. The 7-foot-2 reserve center averaged 2.4 points with 2.2 rebounds in 31 games last season for the Grizzlies.
Haddadi led Iran to an 8-1 record at the 2011 FIBA Asian Championship in China, averaging 15.4 points and 11.4 rebounds.
Memphis announced the deal on Saturday.