The deal is worth a little more than $9 million according to the report. The third year is a player option.
Arthur, 24, missed most of last season after tearing his right Achilles tendon. In the 2010-11 season, he was extremely productive off the Memphis bench averaging 9.1 points and 4.3 rebounds in about 20 minutes per game.
Arthur was drafted by the Grizzlies in 2008 out of Memphis.
The Grizzlies however let O.J. Mayo walk in free agency and are in need of an extra shooter. But it's one piece at a time and added extra bodies up front in the rough and sizable Western Conference is key.
Arthur was a restricted free agent so the Grizzlies would've had the opportunity to match any offer. He can't officially sign until July 11 when the free agent moratorium is lifted.