The Rockets are about to acquire Iman Shumpert. They were rumored to be offering Knight and a first as their primary package to do just that, and they banked those chips in this deal.
In a separate transaction, the Cavs will send Nik Stauskas and Wade Baldwin, both acquired from Portland earlier in the week in the deal that sent Rodney Hood to the Trail Blazers, to Houston.
The Rockets made this deal to get Knight's contract off the books.
The Rockets have been in search of a wing player for the better part of the season. With Shumpert making $11 million this season on an expiring contract, the trade will also free Houston from paying the $15.6 million Knight is owed next season.
The 6-6, 205-pound guard was taken with the eighth overall pick in the 2014 draft by the Sacramento Kings out of MI. That means the Hawks will only receive a pair of second-round picks in exchange for Korver.
This is the third time Stauskas and Baldwin have been traded in the last week.