Magic spokesman George Galante confirmed that Howard informed the team before Wednesday night's game against the Spurs that he will not waive the early termination clause in his contact, which would have guaranteed Howard sticking around at least one more season.
Howard's decision was first reported by ESPN.
The trade deadline is 3 p.m. Thursday. Howard said publicly this week he wants to finish the season in Orlando and encouraged the front office to "roll the dice" on re-signing him this summer. The Magic, however, are looking for stronger assurances they can realistically hang onto the NBA's most dominant big man.
If the Magic don't trade Howard, they risk the 26-year-old signing elsewhere and getting nothing in return for a perennial All-Star hitting his prime. It's a scenario the franchise is loath to repeat after Shaquille O'Neal did the same in 1996.
Howard did not speak to reporters before the game amid talk of him calling a team meeting earlier in San Antonio to discuss his future. Neither general manager Otis Smith nor team president Alex Martins made the trip to Texas.
Magic coach Stan Van Gundy batted down pregame questions about Howard's meeting.
"I don't even want to talk about it. It's so tiresome," Van Gundy said. "I've been dealing with this for three months. Nothing's fresh to me. Talk to somebody else about it."
Howard asked the Magic to trade him before the season but has since rescinded that request. He said after Tuesday's night overtime win against Miami that his change of heart wasn't new.
"Well, I told those guys, I've been telling them for the past two or three weeks now that I want to stay and finish the season," Howard said Tuesday night. "I told them I feel we have a great opportunity to win and I told them that I want to be here and I want to bring a championship here. I told them they've got to give me that chance. They didn't trade me at the beginning of the season and I told them I'd go out and play as hard as I could every night to put our team in a position to win."
The Magic entered Wednesday night 28-15 and 6 1/2 games behind first-place Chicago. Howard is averaging 21.2 points and a career-best 15.2 rebounds.
Provisions in the league's new collective bargaining agreement give the Magic the ability to offer Howard $30 million more than any other team if he becomes a free agent. Orlando can offer him a five-year contract extension with 7.5 per cent annual raises, while other teams are tapped out at offering a four-year pact with only 4.5 per cent raises.