Washington's tax bill will drop from $14.49 million to $9.79 million by trading out Smith's $5.45 million salary for Dekker's $2.68 million salary.
The Cavaliers will receive guard Matthew Dellavedova, centre John Henson, a 2021 first-round pick (from the Bucks) and 2022 second round pick (from the Wizards), while forward Sam Dekker will head from the Cavaliers to the Wizards.
The Cavaliers reunite with Dellavedova, who was a member of the team from 2013-2016. Hill is making $19 million this year, but has just $1 million guaranteed in 2019-20.
The deal came together Friday in time for teams to be able to re-package players in other trades before February's trade deadline.
The money Milwaukee will save with the trade allows them flexibility to continue to upgrade the roster, while the Cavaliers continue show a willingness to take on money to gather draft picks. Dekker, who is from Sheboygan, Wisconsin, and starred at Wisconsin, has been out for more than a month with an ankle injury.
The 28-year-old Dellavedova will get a chance re-start his career with the Cavs. In 12 games this year with the Bucks, Dellavedova was averaging 1.7 points and 2.4 assists.
Henson recently underwent surgery to fix a torn ligament in his left wrist. He's now averaging 10.8 points, 2.8 assists and 2.1 rebounds per game this season.