The move was expected as Denver tries to cut costs. McDyess' agent, Andy Miller, had said the chances of him playing in Denver were "very low to zero."
McDyess, who had two previous stints with Denver, hasn't appeared in any games for the Nuggets since the trade.
The 34-year-old forward has averaged 13.4 points and 7.7 rebounds per game in 12 seasons. He averaged seven points and four rebounds in two games for Detroit before the trade.
Besides the Nuggets and Pistons, he has played for the New York Knicks and Phoenix Suns.
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