LeBron James to become free agent after letting Cavaliers know he will not exercise option on contract

Still on vacation in the Caribbean, LeBron James took the next step toward his future Friday.

James’ agent, Rich Paul, told the Cleveland Cavaliers that James will not exercise his $35.6-million option for next season, according to a source who wasn’t authorized to speak publicly. As a result, James will become an unrestricted free agent at 9:01 p.m. PDT on Saturday, joining Paul George, Chris Paul and DeMarcus Cousins, who is recovering from a torn Achilles’ tendon, as the top free agents on the market this summer.

The Lakers hope to sign James and George as they work to give their roster an extreme makeover and return to being a championship contender. James still could return to the Cavaliers with a new contract.

Free agency isn’t the only place the Lakers are seeking the players they’ll need to go from a 35-win team to a contender. They have been in talks to try to trade for San Antonio Spurs star Kawhi Leonard, a Los Angeles native who reportedly would like to play for the team.

A trade with the Spurs could be costly for the Lakers, who had what one source called “productive” conversations with the Spurs on Wednesday. San Antonio has interest in Brandon Ingram and Kyle Kuzma. While the Lakers have long been open to the idea of trading any of their players for the right deal, they are keen on getting the proper value for any players they trade away.

One more potentially complicating factor arose Friday, when Yahoo Sports reported that point guard Lonzo Ball had a torn left meniscus.

While sources who weren’t authorized to speak publicly indicated the injury isn’t serious, Ball could need more treatment for the injury, which has irritated him recently. The course of treatment has not been determined.

Ball had a sprained medial collateral ligament in his left knee in January and what the Lakers described as a contusion in the same knee near the end of his rookie season. In all, he missed 30 games with his knee injuries and a shoulder injury sustained in December. Heading into the offseason, Ball told Lakers general manager Rob Pelinka and president of basketball operations Magic Johnson that his goal for next season was to play in all 82 games.

Although the Spurs weren’t interested in trading for Ball, it’s possible a third team might have been interested in a way that could have helped facilitate the trade. Ball, though, is a player the Lakers believe can be an important part of the franchise as he improves.

The Lakers have been preparing for this summer since hiring Johnson and Pelinka in the spring of 2017. Last summer they traded away Timofey Mozgov and D’Angelo Russell, shedding the $16 million-a-year salary given to Mozgov when Mitch Kupchak was the team’s general manager and Jim Buss was its executive vice president of basketball operations.

Coming off a 26-win season, the Lakers secured the second overall pick in the lottery, using it to draft Ball.

During free agency last year, some opportunities to sign players to multi-year deals presented themselves, but the Lakers remained disciplined in their plan to only offer one-year deals. That allowed them to save as much salary cap space as possible for this summer.

Then at the trade deadline, the Lakers moved more money. They sent Larry Nance Jr. and Jordan Clarkson, who is owed about $26 million over the next two years, to the Cleveland Cavaliers in exchange for two players with expiring contracts — Channing Frye and Isaiah Thomas.

That move gave the Lakers the salary cap space to sign two free agents to maximum contracts with a few moves.

The easiest path would be to renounce their rights to Julius Randle and waive Luol Deng and stretch his contract, spreading out his salary cap hit over the next five years. Deng is still owed $36 million over two years after being signed by the previous regime.

The Lakers extended a qualifying offer of $5.6 million to Randle on Wednesday, which allowed them to retain his rights as a restricted free agent. It also means that as they go through free agency, there will be a salary cap hold of about $12.5 million for as long as they retain the right to match any offer given to Randle. He may begin negotiating with other teams once the market opens Saturday night and he can sign an offer sheet July 6. The Lakers would then have 48 hours to match that offer.

Randle impressed the Lakers with his physical transformation last summer and his mental toughness in becoming one of their best players despite losing his starting job at the beginning of the season. But they could still make what would be a difficult decision to move on from him if they have the opportunity to sign two players to maximum contracts.

Of course, whether the Lakers need to do that will depend on James, George and others.

George grew up in Palmdale, dreaming of playing for the Lakers. But George is also a fiercely loyal person, so loyal that he once considered skipping an AAU basketball tournament with some of the country’s elite high school players because he thought his high school team needed him more. George has enjoyed playing with Thunder star Russell Westbrook since his trade from Indiana to Oklahoma City last July and has been treated well by the organization.

If the Lakers don’t need the salary cap space, they won’t waive Deng. And they certainly won’t give up on a promising young player like Randle if it isn’t absolutely necessary.

tania.ganguli@latimes.com | Twitter: @taniaganguli