The BayHawks announced the roster move Tuesday afternoon.
League sources told ESPNNewYork.com on Tuesday that the younger Smith had several run-ins with the BayHawks' coaching staff, which contributed to the team's decision to release him.
Smith began the season on the Knicks' roster. His inclusion on the 15-man roster stirred strong emotion from the team's fan base because of his ties to his brother. Both the Knicks and Chris Smith have acknowledged that Smith's older brother was a factor in the team's decision to keep him.
The 26-year-old's inclusion on the roster also spurred a negative reaction from at least one NBA player.
Detroit's Brandon Jennings engaged in a Twitter spat with J.R. Smith after questioning Chris Smith's credentials. J.R. Smith was fined $25,000 for directing hostile and inappropriate language toward Jennings in a response tweet.
Some rival agents believe Chris Smith's roster spot with the Knicks was locked in as a package deal when J.R. Smith re-signed with the team in July, though the league never investigated the matter.
In 23 games with the BayHawks, Smith averaged 8.1 points and 3.3 rebounds.