Laettner's business partner, Brian Davis, who has an agreement to buy the team, said in a statement on Tuesday that the former Duke star will hold off on resuming his career.
Davis said that Laettner, a business associate and investor in the Grizzlies project, wants to play for Memphis but will wait.
"After speaking with Grizzlies management, we have determined that while the sale of the Memphis Grizzlies is pending, Christian Laettner will not play for the team," Davis said. "Both Christian and I are excited about the future of this franchise, but feel adding him to the roster could be disruptive at this time."
Davis and Laettner, a 13-year NBA veteran, were co-captains for national champion Duke in 1991 and 1992. Laettner was out of the league last season after a stint with Miami.
Grizzlies owner Michael Heisley announced an agreement Monday to sell his majority share of the Memphis franchise to a group of investors led by Davis, a real estate developer who played in four Final Fours from 1989-92.
Heisley said Davis has an agreement to buy his 70 percent interest in the Grizzlies, with the team's value put at $360 million.
The Grizzlies purchase would take several months if approved by the NBA. The team's minority owners, who have first rights to buy the franchise, could come up with their own offer.
Davis has not identified his major investors but said he and Laettner will put a total of $40 million in the purchase. Davis said he plans to move to Memphis after the sale and be a "hands-on" majority owner of the Grizzlies.